Market Overview

More Bullish Sentiment: Jefferies Upgrades Oracle To Buy

Related ORCL
After Big Monday Rally, Markets Approach Recent Highs As Earnings Season Looms
Is SS&C Technologies A Buy At Its Current P/E Multiple?
Cambiar Investors Llc Buys International, Chevron Corp, Rockwell Automation Inc, ... (GuruFocus)

In a report published Thursday, Jefferies analyst John DiFucci upgraded the rating on Oracle Corporation (NYSE: ORCL) from Hold to Buy, while raising the price target from $41 to $50.

12c/Exadata Product Cycles

The analyst expects the 12c product cycle to eventually drive incremental revenue for the company via the sale of options, which would in turn drive sales of the Exadata product. The annual opportunities for multi-tenancy and in-memory options are estimated at $3.8 billion and $5.0 billion, respectively.

Move to the Cloud

According to the Jefferies report, Oracle is also expected to maintain a relevant IT vendor with its aggressive shift to the cloud, and that alternative database technologies are not "a death knell" for the company. The analyst believes that Oracle has "decent" growth prospects in the longer term.

Cloud to Drive Growth

Similar sentiments had been expressed, in a report published July 13, by Piper Jaffray analyst Katherine R. Egbert, who reiterated an Overweight rating on Oracle, while lowering the price target from $49 to $46.

Egbert had stated, "A more complete look at Oracle's combined license and cloud business shows growth overall, with license decreases being made up by cloud revenue."

The analyst also reported that the company had reported acceleration in cloud billings for each quarter in FY15, with channel checks indicating that the cloud momentum would continue.

Positive Growth Trends

In another report, published July 15, Morgan Stanley analyst Keith Weiss had maintained an Overweight rating and $150 price target on Oracle, saying that the company had been able to sustain positive underlying growth trends through FY15, across license and billings, as evident from the impact of the Cloud on the company's reported revenue for Q4.

A bullish sentiment on the stock was evident even before, with a report published on July 1, where Canaccord's Richard Davis Jr. maintained a Buy rating and price target of $50 on Oracle, while mentioning that the recent dip in the share price presented an attractive buying opportunity.

Bottom Line

"The bottom line is that the firm's transition to the cloud is happening faster than expected, which when viewed objectively is actually a good thing. We cannot stress enough that the economics of a cloud subscription, versus a license + maintenance deal, are more attractive by a factor of 2-3x over the long term," Davis, Jr. had stated.

Latest Ratings for ORCL

Jun 2018NomuraMaintainsBuyBuy
Jun 2018Raymond JamesMaintainsOutperformOutperform
Jun 2018RosenblattDowngradesBuyNeutral

View More Analyst Ratings for ORCL
View the Latest Analyst Ratings

Posted-In: Canaccord Genuity JefferiesAnalyst Color Long Ideas Upgrades Price Target Analyst Ratings Trading Ideas


Related Articles (ORCL)

View Comments and Join the Discussion!