Oracle Still A Buy, Has Strength In The Cloud, DA Davidson Says

In a report published Thursday, DA Davidson analyst Jack Andrews maintained a Buy rating on Oracle Corporation ORCL, with a price target of $51, saying that the company may report healthy quarterly results backed by strength in Cloud and seasonality. Oracle is scheduled to report its F4Q15 results on June 17, after the market close. Analyst Jack Andrews expects the company to report a 1.8 percent year-over-year decline in revenue to $11,118 million, better than the consensus expectations of a 3.2 percent decline to $10,961 million. Oracle's non-GAAP EPS is expected to come in at $0.89, ahead of consensus at $0.87. Analyst Jack Andrews wrote, "We believe investors have historically had high expectations for a strong FY4Q from Oracle, as evidenced by the relationship typically seen between stock reactions and earnings surprises. Although the most recent FY4Q results (FY4Q13 and FY4Q14) have come in below the consensus expectation, we believe the strength and visibility of the cloud business will likely contribute to a strong FY4Q." Oracle's recently-hosted customer panel, wherein selected customers discussed the company's SaaS and Paas & Iaas software, yielded "positive commentary," which indicated that Oracle "has a significant opportunity to drive products both deeper into and across organizations," Andrews said. Oracle's F4Q15 results are expected to indicate currency headwind, but this is already reflected in the DA Davidson estimates.