Analysts raise Oracle (ORCL) numbers after 'better-than-feared' results

Oracle (NYSE: ORCL) shares are trading almost 3% higher today after the company reported better-than-expected earnings for its second fiscal quarter.

Oracle posted an adjusted EPS of $1.12 on revenue of $12.3 billion, beating the analyst consensus for earnings of $1.16 per share on revenue of $11.95B. Revenue rose 18% year-over-year as cloud services revenue increased by 14% to $8.6B.

"In Q2, Oracle's total revenue grew 25% in constant currency—exceeding the high end of our guidance by more than $200 million," said Oracle CEO, Safra Catz. "That strong overall revenue growth was powered by our infrastructure and applications cloud businesses that grew 59% and 45% respectively, in constant currency."

Oracle also declared a quarterly cash dividend of $0.32 per share.

Piper Sandler analyst Brent Bracelin raised the price target to $85 from $75 per share after “solid and better-than-feared” results.

“We are raising our PT to reflect a slightly higher growth trajectory through FY27 and the assumption that the FCF margin has troughed and could begin to recover into next year (discount rate unchanged). While our bias is turning more constructive, we maintain at Neutral until we see further evidence of a sustainable path to double-digit revenue growth and improving FCF margins,” Bracelin said in a client note.

Deutsche Bank analyst Brad Zelnick said the FQ2 results showed an “acceleration in a decelerating backdrop.” As a result, Zelnick reiterated a Buy rating on ORCL stock after “particularly impressive results against a difficult backdrop, featuring organic acceleration and OCI strength.”

|If there is any company where we feel comfortable relying on capex as a leading indicator, it would be Oracle, and it is expected to remain at these levels for the next few quarters. It is apparent to us that OCI increasingly has a seat at the table with some of the largest and most demanding purchasers of cloud infrastructure,” Zelnick wrote.

Other sell-side firms, including Bank of America and Stifel, also raised price targets on Oracle stock.

By Senad Karaahmetovic

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