Oracle Shares Soar After Analysts Boost Price Targets

Oracle shares surged nearly 12% in pre-market trading on Friday as several equity analysts raised their price targets after the world’s largest database management company beat earnings estimates for the fiscal second quarter and forecasts profit and revenue above expectations for the ongoing quarter.

On Thursday, the Austin, Texas-based computer technology corporation said it earned $1.21 per share on revenue of $10.36 billion, topping analysts expectations of $1.11 per share on revenue of $10.21 billion.

The company said its cloud services and license support revenues were up 6% to $7.6 billion. Cloud license and on-premise license revenues were up 13% to $1.2 billion.

The company expects to earn $1.19 to $1.23 per share in the current quarter, higher than the Wall Street consensus estimates of $1.16. Revenue is expected to be $10.7 billion to $10.9 billion, above expectations of $10.56 billion, Reuters reported.

This resulted in very optimistic earnings expectations, prompting several equity analysts to raise their one-year price targets. Stifel raised the target price to $87 from $77. Deutsche Bank lifted the target price to $120 from $110. BMO upped the target price to $115 from $100. Citigroup increased the price target to $100 from $89. JP Morgan raised the target price to $110 from $89.

Following this, Oracle stock rose nearly 12% to $99.29 in pre-market trading on Friday. The stock surged over 37% so far this year.

Analyst Comments

“Database market is hot and Oracle riding the wave. One clear theme through CYQ3 prints this earnings season has been the very strong demand environment in the data management space, and with 16% YoY growth in their license business Oracle looks to have been a real beneficiary,” noted Keith Weiss, equity analyst at Morgan Stanley.

“Upside on revenues, better durability of margins and a solid pace of share repurchases kept EPS growth solidly in the mid-teens. Improving growth trends in the Cloud businesses at an improving scale starts to tip the scales on overall revenue growth, tilting the risk/reward more positively.”

Oracle Stock Price Forecast

Twenty-one analysts who offered stock ratings for Oracle in the last three months forecast the average price in 12 months of $97.94 with a high forecast of $125.00 and a low forecast of $66.00.

The average price target represents a 10.33% change from the last price of $88.77. Of those 21 analysts, seven rated “Buy”, 13 rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $87 with a high of $105 under a bull scenario and $57 under the worst-case scenario. The firm gave an “Equal-weight” rating on the enterprise software giant’s stock.

Technical analysis suggests it is good to buy as 150-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

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