On Thursday, Oracle (NASDAQ:ORCL) stock fell 4.7% and closed at $45.07 with a market cap of $142.1 billion. The Dow Jones Industrial Average and the S&P 500 rose 1.0% and 0.5% on the same day, respectively.
Oracle’s stock price has risen 13.2% in the trailing five-day period, while it has fallen 16.6% in the trailing 12-month period. The stock is trading 25.5% below its 52-week high of $60.50 on July 10, 2019. The stock was also trading 13.5% above its 52-week low of $39.71 on March 12, 2020. On a YTD (year-to-date) basis, the stock has fallen by 14.9% as of Thursday.
Analysts’ recommendations for Oracle stock
As of Thursday, 34 analysts cover Oracle stock. Among the analysts, ten or ~29.4% of the analysts recommend a “buy” for the stock, 20 or ~58.8% recommend a “hold,” and four or ~11.8% recommend a “sell.” Analysts have an average target price of $49.92 on Oracle. The target price implies a return of 10.8% based on the closing price of $45.07 on Thursday. The consensus target price for the stock has fallen from $55.67 in February—a fall of 10.3%. The highest target price estimate is $61, while the lowest is $35.
On Friday, JPMorgan Chase analyst Mark Murphy upgraded Oracle stock to “overweight” from “neutral.” The analyst increased its target price on the stock from $51 to $55. According to a report from TheFly, “The stock has essentially flat lined since mid-June 2015 through yesterday, but everything that screens so wrong with Oracle in a bull market or economic expansion flips around in the type of environment we might be entering into.” The report also said, “The shares are pricing in an earnings decline driven by a license and hardware miss…However, over 70% of Oracle’s total revenue is recurring/renewable, which adds resiliency to the model.”
Oracle’s financial performance
Last week, Oracle announced its earnings for the third quarter of fiscal 2020 ended February 29. The company reported sales of $9.8 billion with an adjusted EPS of $0.97. The sales rose 1.9% YoY (year-over-year) in the third quarter. Analysts expected the company to post sales of $9.75 billion and earnings of $0.96 in the third quarter.
Analysts expect Oracle’s revenues to rise by 0.4% in fiscal 2020 to $39.7 billion. The sales will likely rise by 1.5% in fiscal 2021 to $40.3 billion. The adjusted earnings will likely rise from $3.52 in fiscal 2019 to $3.88 per share in fiscal 2020. However, the profits could rise by 8.0% YoY to $4.19 per share in fiscal 2021.
Oracle stock performance
Oracle stock closed 5.9% below its 20-day moving average of $47.88 on Thursday. However, the stock was 13.1% and 15.7% below its 50-day and 100-day moving averages of $51.89 and $53.46, respectively. Oracle’s 14-day MACD is -0.03, which suggests a downward trading pattern. With a 14-day RSI (relative strength index) score of 43.5, the stock isn’t oversold or overbought.
Oracle has an upper Bollinger Band level of $55.14. The company’s middle Bollinger Band level is $48.26, while its lower Bollinger Band level is $41.38. On Thursday, the stock closed near its middle Bollinger Band level, which also suggests that it’s neutral.
Currently, Oracle stock is trading at 11.61x its fiscal 2020 estimated EPS of $3.88. The stock is trading at 10.75x its fiscal 2021 estimated EPS of $4.19. Wall Street analysts expect Oracle’s earnings to rise at a CAGR of 9.61% over the next five years.
In the third quarter of fiscal 2020, the Oracle’s cash flow from operations was $3.0 billion, while its free cash flow was $2.6 billion. During the third quarter, the company’s board increased the share repurchase authorization by $15 billion. In the third quarter of fiscal 2020, Oracle returned $768 million to investors in the form of dividends. The company’s dividend yield was 2.13% as of Thursday. Microsoft (NASDAQ:MSFT) and IBM (NYSE:IBM) also pay cash dividends regularly. They have yields of 1.43% and 6.46%, respectively.
Oracle stock is trending upward in today’s trading session. The stock rose by 2.6% at 10:38 AM ET. Read Oracle Stock Rebounded Due to Solid Q3 Earnings, Share Buybacks to learn more.