Oracle (ORCL) PT Raised to $270 at Evercore ISI

Evercore ISI analyst Kirk Materne raised the price target on Oracle (NYSE: ORCL) to $270.00 (from $215.00) while maintaining a Outperform rating.

The analyst comments "It’s been quite a run for Oracle shares over the past month. The company’s FY26 outlook came in more upbeat than expected, and the recent filing spotlighting a $30 billion annual contract helps solidify Oracle’s spot as the ‘fourth’ global hyperscaler. Given the growing importance of OCI as a part of the broader revenue reacceleration narrative, in this note we break OCI into three segments: ‘core OCI’, AI OCI, and DBaaS – and assign what we think are reasonable revenue growth and gross margin estimates to each. In our base case, we model core OCI growing at a 49% CAGR through FY29, DBaaS at 37%, and AI services at 104%, with FY29 gross margins of roughly 65%, 75%, and 30%, respectively. While this mix shift puts downward pressure on gross and operating margins at a company level, in our ‘base case’ scenario (which doesn’t fully reflect the giant cloud deal) we still forecast operating income growing at a 13% CAGR through FY29, with annualized EPS growth of 11%. This also assumes some additional interest expense given the rising capex. If OCI skews more toward AI, which seems increasingly likely given the recent filing and underpins our bull case (see page 9), we’d expect a bigger drag on margins and FCF but higher revenue and EPS than our base case. For EVR-ISI clients, we’ve built a “choose your own adventure” (CYOA) model so that you can plug in your own growth and margin estimates and see how it flows through the income statement."

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