Deutsche Bank Waits For Another Quarter On Oracle

Deutsche Bank commented on Oracle Corporation ORCL following the SAP SE (ADR) SAP analyst session.

SAP told analysts that its organic cloud subscription growth through 2020 is expected to be 30+ percent, or €7.5-€8.0 billion. Analyst Karl Keirstead indicated that Oracle has been “equally aggressive about the cloud (raising the risk profile of the pure-play SaaS vendors).”

SAP cautioned that the shift to the cloud mix will depress margins, however, Oracle has stated that its cloud ramp-up “will have no negative impact on margins,” which had been a concern for investors, according to Keirstead.

Keirstead felt that with Oracle trading at 14x FY 2015 non-GAAP EPS, the firm would “like to see another quarter of solid database software license growth before getting more constructive.”

The firm maintained a Hold rating on the stock with a $44 price target. Oracle's Q3 results are expected on March 16.

Oracle recently traded at $42.46, down 1.4 percent.