JPMorgan raises Oracle stock price target on resilient revenue By Investing.com

JPMorgan has made a notable adjustment to its financial outlook for Oracle Corporation (NYSE: NYSE:), increasing the stock’s price target from $120.00 to $140.00.

The firm has decided to maintain a Neutral rating on the stock.

The investment firm highlighted Oracle’s robust and largely recurring revenue stream, which is seen as relatively low-risk compared to sectors like airlines, hotels, energy, restaurants, and retail.

This strength is expected to position Oracle favorably in a post-pandemic landscape, potentially making it a go-to choice for investors seeking value and safety within the software sector.

Oracle’s financial resilience is also attributed to the company’s favorable business mix shift. Cloud applications, Oracle Cloud Infrastructure (OCI), and strategic hardware have been identified as growing segments, increasingly contributing to the company’s revenue while the less profitable sectors diminish in significance.

Additionally, more than 70% of Oracle’s total revenue is now recurring or renewable, including maintenance contracts, which adds an extra layer of stability to the company’s financial model.

JPMorgan also pointed out Oracle’s continued cost management and the lasting effects of pandemic-induced savings, such as reduced travel, more remote work, and a smaller real estate footprint, which could help operating profit grow faster than revenue.

Despite recognizing Oracle’s potential and its solid business model, JPMorgan views the current risk-reward balance as even, which is reflected in the unchanged Neutral rating even with the increased price target.

InvestingPro Insights

As Oracle Corporation (NYSE:ORCL) garners a revised price target and maintains a steady outlook from JPMorgan, real-time data from InvestingPro provides further context for investors evaluating the company’s current market position. Oracle’s market capitalization stands at a robust $447.18 billion, reflecting its significant presence in the industry. The company’s P/E ratio, a measure of its current share price relative to its per-share earnings, is at 40.52, suggesting a premium valuation that investors are willing to pay for its earnings potential. Over the last twelve months leading up to Q1 2023, Oracle has demonstrated a revenue growth of 5.6%, underlining its ability to expand its financial base in a competitive market.

InvestingPro Tips indicate that Oracle has been a consistent performer with regards to dividend payments, having raised its dividend for 11 consecutive years. This could be particularly appealing to income-focused investors seeking reliable dividend growth. Additionally, Oracle’s significant return over the last week, with a price total return of 13.8%, showcases the company’s recent strong performance in the market. However, it’s important to note that 11 analysts have revised their earnings estimates downwards for the upcoming period, which may need to be considered in the context of the company’s high earnings multiple.

For investors looking for a deeper dive into Oracle’s performance metrics and future prospects, there are additional InvestingPro Tips available at https://www.investing.com/pro/ORCL. These tips offer insights that could be valuable for making informed investment decisions in the software industry giant.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.