Evercore ISI Raises Oracle Price Target to $245

Evercore ISI analyst Kirk Materne raised the price target on Oracle (NYSE: ORCL) to $245.00 while maintaining an Outperform rating.

“Oracle is set to report F4Q results on Wednesday (June 10th), and we expect results that demonstrate continued OCI acceleration and durability in its Cloud (apps + infra) business.

We are modeling F4Q26 revenue of $19.0bn (+19.5%) vs. Street estimates of $19.1bn (+20.1%) and EPS of $1.95 vs. Street estimates of $1.96.

We are modeling OCI growth of 89%, accelerating q/q from ~84% in Q3, and Strategic SaaS growth of ~21%, modestly accelerating q/q from ~20% in F3Q.

ORCL’s RPO balance stood at $553bn last quarter (+325% y/y), and we believe RPO can continue to build as large companies and governments view ORCL as a strategic cloud and AI partner. cRPO growth strongly accelerated to ~65% y/y in F3Q26, implying ~74% of the $90bn FY27 guide or ~82% of our NTM revenue estimates – highlighting a coverage ratio well-above the LTM (~66%) or the last 3 years (~62%).

As such, we expect our estimates, which are admittedly a bit below consensus, have room to move higher.

We expect that the recently announced RIF at Oracle should help the company offset higher COGS due to the AI infrastructure buildout.

In terms of other topics to note: 1) This will be new CFO, Hilary Maxxon’s, first earnings call, and as such, we don’t expect any major changes to the prior FY27 total revenue guide of ~$90bn; 2) Given the ongoing shortages in memory, we expect both our/Street capex estimates ($71bn/$61bn) may have to move higher unless there is a big shift towards BYOC among Oracle’s major customers; and 3) We expect the recent RIF should help drive higher operating leverage at the opex line and offset lower GM’s as AI-based OCI revenue ramps.

Bottom line: While we believe a higher capex guide could limit upside coming away from the F4Q print, we continue to believe that the risk/reward skews positively at 21.5x GAAP EPS as revenue growth accelerates into FY27.

In our view, delivering ‘clean’ F4Q results, a reiteration of revenue acceleration into FY27/FY28, and providing visibility into the previously disclosed equity raise could ultimately serve as a clearing event for the shares heading into the summer.

Maintain Outperform and we are bumping our PT to $245 (~28x CY27 EPS).”

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