Oppenheimer Reiterates Outperform on Oracle, $275 PT
Oppenheimer analyst Brian Schwartz reiterated an Outperform rating and $275 price target on Oracle (NYSE: ORCL).
“We reiterate our Outperform rating on Oracle after F1Q results show good returns from the capital-intensive business transition.
Positively, OCI growth more than doubled y/y and exceeded expectations, capacity delivery accelerated sharply, infrastructure demand still outruns supply, and operating income grew strongly again.
The latter suggests Oracle can offset AI-driven gross margin compression with a leaner cost base post-restructuring.
Negatively, net-new RPO normalized after an outsized F4Q26, gross margin compression persists, and cash-flow quality is increasingly reliant on customer prepayments rather than operations.
Further, mostly holding the annual revenue guide despite the F1Q beat leaves tough optics and feeds bear concerns on capex returns.
However, completing its ATM and management commentary that new contracts require no incremental capital reduces the financing overhang, in our view.”
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