Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Piper Sandler upgraded Oracle (NYSE:ORCL) from Neutral to Overweight on Thursday, while significantly raising its price target to $270.00 from $190.00. The upgrade comes as Oracle trades near its 52-week high of $241.44, having delivered impressive returns of over 67% in the past year. According to InvestingPro data, 12 analysts have recently revised their earnings estimates upward for the upcoming period.
The upgrade comes after Piper Sandler’s CIO survey revealed "additional upside levers" for Oracle, highlighting increased enterprise momentum that could add another growth layer beyond the company’s existing OpenAI and Stargate opportunities. The company, now valued at $662.35 billion, has demonstrated solid revenue growth of 8.38% over the last twelve months. InvestingPro analysis indicates the stock is trading above its Fair Value, with multiple valuation metrics at elevated levels.
The research firm’s new price target represents a substantial 42% increase from its previous valuation and is based on forward-looking estimates through calendar year 2030, extended from the previous 2029 timeframe.
Piper Sandler now projects a 38% calendar year 2030 free cash flow margin for Oracle, up from its previous 34.5% estimate for 2029, citing "strong AI momentum" as a key factor in the improved outlook.
The new valuation model applies a 22x multiple to Oracle’s calendar year 2030 enterprise value to operating cash flow ratio, discounted back three years at a 14% rate.
In other recent news, Oracle has announced a multi-year cloud contract expected to generate over $30 billion in annual revenue starting in fiscal year 2028. This contract has captured the attention of several analyst firms. Bernstein has raised its price target for Oracle to $269, citing the company’s growth acceleration and the strategic value of its cloud infrastructure, while maintaining an Outperform rating. TD Cowen also increased its price target to $275, suggesting that Oracle’s total revenues could reach approximately $150 billion in fiscal year 2029, driven by the potential large deal with OpenAI.
Conversely, S&P Global Ratings revised Oracle’s outlook to negative from stable, noting that while the company’s cloud infrastructure business is expanding rapidly, it is straining cash flow. Oracle’s fiscal 2025 capital expenditure more than tripled to $21 billion, and S&P forecasts this will reach nearly $27 billion in fiscal 2026. Despite these concerns, Oracle reported strong operating results in fiscal 2025, with revenues growing 8.4% year over year to $57.4 billion, and cloud services growing 24% to $24.5 billion. Citizens JMP maintained a $240 price target, emphasizing recent cloud service agreements, including the potential expansion of data center capacity with OpenAI. These developments highlight Oracle’s strategic moves in the cloud sector and its potential impact on future revenue and growth.
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