Derrick Wood, an analyst from TD Cowen, maintained the Buy rating on Oracle (ORCL – Research Report). The associated price target is $130.00.
Derrick Wood has given his Buy rating due to a combination of factors, including Oracle’s anticipated revenue growth and the company’s positioning within the cloud industry. Oracle is expected to show an acceleration in revenue growth, moving from approximately 4% in the previous quarter to an estimated 7% on a constant currency basis, which is considered an improvement. Furthermore, with the Oracle Cloud Infrastructure (OCI) projected to grow at 49%, it surpasses the average market expectations. This growth trajectory, alongside relatively subdued investor sentiment after mixed results in the first half, suggests a potential upside if the company delivers clean results.
Additionally, Derrick Wood’s positive outlook is bolstered by the performance of Oracle’s SaaS offerings and the strategic significance of OCI as a new growth driver, with the cloud market trends now turning more favorable. Despite past challenges such as supply constraints and the drag from Cerner revenue, management’s expectations for future growth and profitability, coupled with the signing of substantial contracts, indicate strong demand and a well-positioned Oracle in the medium term. Confidence in Oracle’s ability to meet or exceed expectations, paired with a reasonable valuation at approximately 18 times the FY25 P/E, forms the basis of Wood’s Buy rating.
According to TipRanks, Wood is a 5-star analyst with an average return of 14.9% and a 61.47% success rate. Wood covers the Technology sector, focusing on stocks such as Microsoft, ServiceNow, and Snowflake.
In another report released today, Jefferies also maintained a Buy rating on the stock with a $145.00 price target.
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Oracle (ORCL) Company Description:
Oracle Corp. engages in the provision of products and services that address all aspects of corporate information technology environments. It operates through the following business segments: Cloud and License, Hardware, and Services. The Cloud and License segment markets, sells, and delivers applications, platform, and infrastructure technologies. The Hardware segment provides hardware products and hardware-related software products including Oracle Engineered Systems, servers, storage, industry-specific hardware, operating systems, virtualization, management and other hardware related software, and related hardware support. The Services segment offers consulting, advanced support, and education services. The company was founded by Lawrence Joseph Ellison, Robert Nimrod Miner and Edward A. Oates on June 16, 1977 and is headquartered in Redwood City, CA.
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