Stifel Lowers Oracle Price Target to $220
Stifel analyst Brad Reback lowered the price target on Oracle (NYSE: ORCL) to $220.00 (from $275.00) while maintaining a Buy rating.
“Oracle is up ~9% AH, as Cloud revenue (~$8.9B, +41% Y/Y-CC) reached the high end of guidance, driven by AI infrastructure (+243% Y/Y) and Multi-cloud database (+531% Y/Y).
Given management’s commentary demand for these offerings outweighs supply, we expect accelerating revenue growth for these solutions to contribute to accelerating IaaS growth as additional DC-capacity/multi-cloud database regions come online in coming quarters.
EPS beat by ~5 cents on a lower tax rate/opex discipline as the GM of new AI capacity added in Q3 was ~32%, in-line with management’s target model (30-40%).
Looking forward, management reiterated the FY26 revenue guide (>$67B) and $50B of Capex, but raised the FY27 guide by $1B to $90B. We expect sustained CAPEX growth in FY27 ($75B).
Net/net, we believe that accelerating IaaS growth stemming from AI and multi-database cloud, and sustained momentum in SaaS apps, should lead to better EPS growth rates in FY27.”
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