Oracle stock price target raised to $364 from $363 at Bernstein

Investing.com - Bernstein SocGen Group raised its price target on Oracle (NYSE:ORCL) to $364.00 from $363.00 while maintaining an Outperform rating. The stock, currently trading at $291.94, has delivered an impressive 76% return year-to-date, according to InvestingPro data.

The firm updated its long-term view following Oracle’s recent earnings call, where management guided to $144 billion in Oracle Cloud Infrastructure (OCI) revenue for fiscal year 2030 and reported a $317 billion quarter-over-quarter increase in remaining performance obligations (RPO). With a current market capitalization of $828 billion and trailing twelve-month revenue of $59 billion, Oracle maintains strong growth momentum.

Bernstein expects Oracle’s revenue and operating profit growth to accelerate over the next few years, with free cash flow margins rebounding once growth slows, creating substantial value for investors. InvestingPro analysis reveals Oracle’s robust financial health score of "GOOD," though current valuation metrics suggest the stock is trading above its Fair Value.

The price target adjustment reflects a 0.5x increase in Bernstein’s price-to-forward earnings multiple, with the firm strongly reiterating its Outperform rating, particularly for investors with longer time horizons.

Bernstein views Oracle as "the most visible way of investing in Gen AI success within the large cap software market," though it cautions that periodic results could deviate from expectations, potentially providing entry points for investors.

In other recent news, Oracle launched the Oracle Government Data Intelligence for Agriculture, an AI solution aimed at assisting governments in monitoring agricultural production and addressing potential food security issues. This new application integrates data from various sources such as satellite imagery and weather feeds to provide insights into agricultural factors. Meanwhile, Rothschild Redburn initiated coverage on Oracle with a Sell rating, expressing concerns that the market overvalues the company’s cloud revenue. The firm set a price target of $175.00, suggesting that optimistic scenarios may not be realized.

Additionally, Oracle’s credit ratings were affirmed by major rating agencies despite concerns about increasing debt levels and negative free cash flow. S&P Global Ratings maintained a ’BBB’ rating with a negative outlook, noting Oracle’s aggressive capital expenditure plans, which could peak above $60 billion by fiscal 2028. In a related development, Oracle is reportedly planning a $15 billion bond offering, including a rare 40-year bond, to support its financial strategies. Finally, Oracle announced leadership changes with Clay Magouyrk and Mike Sicilia appointed as co-CEOs, while Safra Catz transitions to Executive Vice Chair of the board, amidst ongoing talks for a potential AI cloud deal with Meta.

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