Bernstein SocGen Group on Oracle (ORCL): 'A Breather For the Stock, an Entry Point For Investors"; PT Raised

Bernstein SocGen Group analyst Mark L. Moerdler raised the price target on Oracle (NYSE: ORCL) to $213.00 (from $202.00) while maintaining a Outperform rating.

The analyst said: "While the stock reaction was not pretty (down ~8%) in the after market and the quarter and the guidance was in-line to mixed, the story has not changed. In fact, the key drivers of the story were even better than last quarter as 1) OCI YoY growth accelerated; 2) Strategic Back Office grew 18%; 3) Database Cloud grew 28% and hit $2.2B run rate with > $100M from Oracle Cloud @ Azure, GCP and AWS; and 4) margins are better than expected. After the big run up in the stock, this breather was not unexpected or even a problem as it creates a good entry point for the large number of investors doing work on the story.

While this was not a clean quarter like Q1, the key drivers were strong and in fact we see any weakness in the stock as a buying opportunity as OCI growth accelerated; Strategic Back Office grew again 18% YoY; and Cloud database grew 28% reaching $2.2B run rate with >$100M from the partnerships with Azure, GCP and AWS. We raise the price target from $202 to $213, primarily through rolling forward our estimates and increasing P/FE multiple 1 turn to 27x."

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