Oppenheimer Upgrades Oracle to Outperform

Oppenheimer analyst Brian Schwartz upgraded Oracle (NYSE: ORCL) from Perform to Outperform with a price target of $185.00.

“We upgrade ORCL to Outperform from Perform and initiate a $185 PT.

While our call may be early, since it will take time for Oracle to show financial success as a more capital-intensive business in future results, we see a favorable risk/reward after the stock’s multiples have been cut by more than half since September.

Our rating upgrade is premised on the following: 1) Strong EPS compounder. Our base case haircuts management’s revenue guidance by 25% and EPS still doubles by FY30E. 2) Mitigating risks.

Counterparty, financing, and execution risks are starting to mitigate from ORCL’s recent capital raise and megacustomer announcements (OpenAI, TikTok).

3) AI winner. Despite negative SaaS sentiment overhanging valuation, Oracle is relatively immune from AI disruption. 4) Sentiment shift. ORCL is broadly underowned by institutional investors.”

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