Oracle Corporation ORCL shares fell 7 percent despite recording a first quarter earnings beat.
Wells Fargo noted that nothing about the quarter has changed the bank’s conviction that Oracle can return to double-digit EPS in FY2018-2019. Shares fell mostly on weak guidance, in the 2-4 percent range, that Oracle announced on the earnings call.
“Despite investors' concerns, we believe Oracle is positioned to successfully and profitably transition its dominant, high-margin on-premise business to the cloud,” said Wells Fargo analyst Phillip Winslow.
Wells Fargo maintained an Overweight rating with a $62.50 price target.
Meanwhile, Brad Zelnick of Credit Suisse outlined positives and negatives from the quarter.
What Credit Suisse Liked
- Strongest organic revenue growth since first quarter of 2015
- Support revenue expected to be positive throughout the year
- License revenue beat consensus estimates
What Credit Suisse Liked Less
- Cloud revenues were guided below street estimates
- Platform as a service ticked down in the quarter but is expected to exit the year improving
- Transitionary quarter if not for FX benefits
Analysts at Credit Suisse maintained an Overweight rating on Oracle with a $62 price target.
Related Link:
The Core Reasons To Buy Oracle Haven't Changed
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