UPDATE: Goldman Sachs Reinstates Oracle (ORCL) at Sell

June 27, 2022 6:28 AM EDT
Get Alerts ORCL Hot Sheet
Price: $77.35 -0.06%

Rating Summary:
    26 Buy, 29 Hold, 5 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 18 | Down: 53 | New: 12
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(Updated - June 27, 2022 6:29 AM EDT)

Goldman Sachs analyst Kash Rangan reinstates coverage on Oracle (NYSE: ORCL) with a Sell rating and a price target of $75.00.

The analyst comments "While Oracle’s re-acceleration in revenue growth looks encouraging at face value, if we exclude the estimated ~$500mn beat in cloud license and on-premise license, total revenue growth came in ~6% CC, flat-to-down slightly vs. 3Q YoY. We believe the risk-reward skews negative at current levels, due to: 1) Cerner acquisition; the company has what view as an ambitious vision for a unified healthcare database that was laid out at its Future of Healthcare event, but we look for more clarity on the financial implications of the $28bn acquisition and identifiable progress on its integration with Oracle Health, 2) Database market share steadily declining despite Oracle Autonomous Database traction as relational and NoSQL competitors including Microsoft, Google, Amazon and MongoDB win new workloads, 3) Despite the recent momentum in Cloud revenue (IaaS + SaaS), we see risk of a slowdown in net new business in coming quarters as economic pressures lead to budget tightening at customers, 4) Another year of elevated CapEx investments, into a downturn, constrains FCF generation; IaaS business is orders of magnitude lower than Hyperscalers, ROI on CapEx not guaranteed."

For an analyst ratings summary and ratings history on Oracle click here. For more ratings news on Oracle click here.

Shares of Oracle closed at $70.70 yesterday.

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