Evercore Analysts Upgrade Rating and Raise Target Price
In a recent market development, Evercore analysts expressed their optimism about Oracle's stock as they upgraded their rating from In Line (equivalent to Neutral) to Outperform. In addition, they raised the target price for the stock from $131 to $135. This upward revision suggests a potential gain of 23% based on Friday's closing price of $109.96.
Recent Pullback and Potential Growth
Oracle's stock has experienced a decline of 13% since September 11, when the company reported its financial results for the first fiscal quarter. The earnings and outlook fell short of Wall Street's expectations, partly due to challenges faced by the recently acquired Cerner healthcare-software business. However, CEO Safra Catz assured investors that these challenges were temporary, primarily stemming from the shift in customer payment preferences toward cloud subscriptions.
Despite these setbacks, Evercore analysts believe that the recent pullback in Oracle's stock presents an enticing opportunity for investors. They anticipate that the company's core cloud offerings, particularly the apps and infrastructure cloud businesses, will drive revenue growth in the high single digits. In fact, they estimate that Oracle's core business will account for approximately half of its total revenue by fiscal 2026, boosting revenue from $40.5 billion in 2021 to $62.9 billion in 2026. Even Oracle's management forecasts $65 billion in revenue by fiscal 2026.
Conclusion
With Evercore's positive outlook and upgraded rating, Oracle's stock shows promise for investors. The company's strategic focus on its cloud business and projections for future revenue growth make it an interesting investment opportunity.
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