Oracle (ORCL) PT Lowered to $175 at Cantor Fitzgerald

Cantor Fitzgerald analyst Thomas Blakey lowered the price target on Oracle (NYSE: ORCL) to $175.00 (from $214.00) while maintaining a Overweight rating.

The analyst commented, "Oracle reported a slight miss for F3Q25 rev with adjusted EPS in-line and FCF coming in well below. Top-line miss was driven by SaaS, with OCI essentially in-line. F4Q25 forecasts were lowered primarily due to supply constraints and some idiosyncratic customer pressures (Tik Tok), which mgmt. expects to be cleared up by F1Q26 (FYE May). Oracle’s bookings were much stronger than expected and were driven by a handful of large deals (no concentration) and zero Stargate. We believe that capex-related stronger bookings will ramp in F26/F27, meaningfully above Street (FactSet)/Cantor forecasts, which will likely pressure GM% and, as a result, EBIT% in F26 before possibly leveling off in F27. Stronger bookings lead to higher F26/F27 top-line guidance as Oracle is accelerating its OCI business benefiting from AI. Top-line acceleration, driven by OCI/AI with continued slower opex growth vs. total revenue growth, should help offset GM% pressures, and we note our F26 EPS moves lower by 5%, but F27 is essentially unchanged. We lower our PT to $175 from $214 on a lower EV/R multiple (8x vs. 8.5x, previously, and below one-year NTM average 8.5x) to factor in higher execution risks of higher capex, supply constraints, and dependency on training revenues NT as well as lower FCF forecasts NT as Oracle arguably builds out the top tier AI-training and -inference data centers globally. That said, we note these risks appear well discounted in shares at the current level and note favorable risk/reward and accelerating growth in core OCI driven by AI, supporting our OW rating."

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