In a report released yesterday, Bradley Sills from Bank of America Securities reiterated a Hold rating on Oracle (ORCL – Research Report), with a price target of $144.00.
Bradley Sills has given his Hold rating due to a combination of factors surrounding Oracle’s performance and market expectations. While Oracle’s Cloud Infrastructure (OCI) has shown a notable growth of 49% in a constant currency basis, this is only a slight deceleration from the previous quarter’s 50% growth, signaling resilience in a challenging market. Oracle’s new cloud solutions, like OracleDB on Azure and the Alloy offering, are driving this sustained demand, which indicates potential for future growth. However, despite these positives, there are factors that temper the optimism, leading to a Hold rating rather than a more bullish stance.
The outlook for Oracle’s Q4 cloud growth, although solid, falls short of both the company’s and Street’s expectations, with challenges like the underperformance of Cerner and a tough ERP demand environment contributing to a cautious forecast. Moreover, while there is a positive sentiment regarding the FY26 revenue target, the current remaining performance obligations (cRPO) growth is not aligning with the necessary compound annual growth rate to achieve it. Additionally, concerns over margin expansion and the FY26 margin goal are underscored by a leading indicator trending unfavorably. Sills acknowledges these concerns and incorporates them into his rationale for maintaining a Neutral rating despite raising the price objective to $144, based on improved cloud growth prospects.
According to TipRanks, Sills is a 4-star analyst with an average return of 5.2% and a 50.97% success rate. Sills covers the Technology sector, focusing on stocks such as Microsoft, HubSpot, and Adobe.
In another report released today, Goldman Sachs also reiterated a Hold rating on the stock with a $130.00 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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