Oracle (ORCL) PT Lowered to $260 at Scotiabank

Scotiabank analyst Pat Colville lowered the price target on Oracle (NYSE: ORCL) to $260.00 (from $360.00) while maintaining a Sector Outperform rating.

The analyst commented: "We reiterate our Sector Outperform on Oracle after an acceleration print as its “AI factory” data centers go into service, but unfortunately results came in a touch light of targets set in September. Cloud revenue in Q2 was 1ppt below the mid-point of guidance and management only reaffirmed its F26 OCI target. Oracle skeptics “want to see it to believe it” and will point to this print as evidence of the risk embedded in management’s targets. F2Q EPS missed the midpoint of guidance set in September stripping out a one off asset sale, and next quarter bottom-line outlook is only in-line with the Street. Oracle shares are down 11.5% after hours as this expectations miss is disappointing and estimates aren’t going-up. But, looking out beyond the here and now, we still like Oracle’s positioning given its differentiators in GPU-as-a-service in its creme-de-la-creme technical expertise and access to the latest silicon, incredible ability to raise capital, and independence from competing with its customers. We think Oracle is well placed to capitalize on the supernova of demand for NeoCloud and with shares off 40% from recent highs we like the risk/reward."

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