Oracle stock rating maintained by RBC Capital amid ambitious growth targets

Investing.com - Oracle (NYSE:ORCL) maintained its Sector Perform rating from RBC Capital, which reiterated its $310.00 price target on the stock following the company’s 2025 Analyst Day in Las Vegas. According to InvestingPro data, Oracle’s current valuation appears elevated, with the stock trading at a P/E ratio of 72.5x and showing high multiples across various metrics.

Oracle presented updated long-term targets, including $225 billion in revenue (31% CAGR) and $21 earnings per share (28% CAGR) by fiscal year 2030, reflecting the company’s confidence in scaling its Oracle Cloud Infrastructure (OCI) business. The company currently generates $59 billion in annual revenue, with InvestingPro analysis showing a solid financial health score of "GOOD" and maintaining 17 consecutive years of dividend payments.

The company raised its OCI long-range target to $166 billion from $144 billion previously, highlighting strong conviction in hyperscale demand, though RBC Capital described these new targets as "aspirational" rather than thesis-changing.

Oracle shares fell approximately 3% in after-hours trading following the analyst day presentation, with RBC maintaining its price target that implies a 43x multiple on its calendar year 2026 estimated EPS. Despite the recent dip, the stock has delivered an impressive 144% return over the past six months, with analyst targets ranging from $175 to $415.

RBC Capital noted that margin trajectory remains a key debate as OCI mix expands and AI-related investments intensify, citing uncertainty around OCI profitability and Oracle’s ability to monetize AI across its product stack as reasons for maintaining its neutral stance. The company maintains a healthy gross profit margin of 70%, though InvestingPro data reveals 15+ additional key metrics and insights available to subscribers, including detailed margin analysis and AI-related growth potential.

In other recent news, Oracle has received a series of updated price targets from multiple financial firms following its recent investor and analyst events. Stephens raised its price target on Oracle to $331, highlighting an increase in Oracle Cloud Infrastructure growth guidance and long-term revenue and earnings projections that exceed Street expectations. Piper Sandler also increased its price target to $380, citing Oracle’s ambitious long-term revenue targets, which include a projected revenue of $225 billion in fiscal year 2030. KeyBanc reiterated its $350 price target, emphasizing Oracle’s strong cloud infrastructure growth and profitability in AI data center projects. Cantor Fitzgerald maintained its $400 price target, expressing confidence in Oracle’s AI strategy and its comprehensive platform capabilities. Additionally, Scotiabank raised its price target to $360, following revelations of significant contracted commitments from new customers. These developments reflect a broad consensus among analysts on Oracle’s promising growth prospects in cloud and AI technologies.

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