Bernstein SocGen Group Lowers Oracle Price Target to $313

Bernstein SocGen Group analyst Mark L.

Moerdler lowered the price target on Oracle (NYSE: ORCL) to $313.00 (from $339.00) while maintaining an Outperform rating.

“What will be the financial impact of the capital raise?

One of the major overhangs on ORCL has been uncertainty surrounding how Oracle would fund the AI datacenter build-out to meet the contracts signed last year.

Last Monday, Oracle announced a $45B – $50B debt and equity program. We estimate it’ll meet funding requirements through FY28 (possibly longer). Here, we model the debt, convertible and equity raises.

With an understanding of the impact on the financials in-place we believe some of the Oracle concerns should start to abate.

We lowered our price target to $313, updating our model with new debt and equity information and lower P/FE multiple from 30x to 28x to reflect peer valuation given the DC buildout-related controversy.

We see this as a solid entry point on what will be one of the few revenue and EPS acceleration stories in software.”

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