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Analysts Upgrade Oracle Stock after Its Upbeat Q4 Results

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Jun. 20 2019, Published 4:23 p.m. ET

Analysts’ recommendations

Of the 33 analysts covering Oracle (ORCL), eight have rated the stock as a “buy,” while 21 have rated it as a “hold.” Four analysts have given the stock “sell” ratings. Analysts have set a target price of $55.68 on the stock, which implies a potential upside of 5.7% based on its closing price of $52.68 on June 19.

Oracle topped its earnings and revenue estimates in the fourth quarter as it benefited from the performance of its cloud services business. In fiscal 2020, Oracle expects its total revenue to grow faster than in fiscal 2019 on a constant-currency basis. The company is also expected to report double-digit EPS growth in the year.

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Analysts’ upgrades

Many analysts have raised their price targets on ORCL since the company’s fourth-quarter earnings results:

  • Raymond James has raised its target to $61 from $57.
  • BMO Capital has raised its target to $59 from $53.
  • Wedbush has raised its target to $55 from $52.
  • Cowen and Company has raised its target to $65 from $56.
  • Evercore ISI has raised its target to $55 from $53.
  • Jefferies has raised its target to $66 from $61.
  • RBC has raised its target to $59 from $57.
  • Credit Suisse has raised its target to $62 from $60.
  • JPMorgan Chase has raised its target to $56 from $53.

Oracle’s valuation

Oracle stock is currently trading at 13.6x its fiscal 2020 estimated EPS of $3.86 and 12.6x its fiscal 2021 estimated EPS of $4.17, which is compelling based on its projected growth rates of ~9.57% and ~8.08%, respectively, in those periods. Moreover, Oracle’s revenues are expected to rise 2.34% in fiscal 2020 and 2.91% in fiscal 2021.

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