CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We keep our 12-month target at $130, on P/E of 21.7x our CY 24 EPS estimate of $5.99, above historical but below peers. We hold our FY 24 (Mar.) EPS at $5.54 and adjust FY 25 to $6.29 from $6.56. ORCL posts Aug-Q EPS of $1.19 vs. $1.03, beating the $1.15 consensus. Sales rose 9%, near expectations, as cloud services and license support growth (+13%) more than offset declines in cloud/on-premise licensing (-10%) and hardware (-6%). We are encouraged by cloud services contribution, up 30% and now 37% of revenue, as we see significant scale potential from generative AI (over $4B of signed contract for AI training capacity; doubling in 3 months). Cloud infrastructure grew 66% while cloud application (SaaS) rose 17%, with NetSuite and Fusion bright spots at +21%. We are disappointed by Nov-Q revenue guide (5%-7% vs. 8.4% consensus; 3%-5% ex. forex) and see limited multiple expansion ahead given growth outlook. We note ORCL’s leveraged financial position ($77B net debt) but are encouraged by improving FCF potential.