Oracle price target lowered to $350 from $400 at TD Cowen

Investing.com - TD Cowen has lowered its price target on Oracle (NYSE:ORCL) to $350 from $400 while maintaining a Buy rating on the stock.

The firm noted that Oracle’s high-level results were mixed in the SaaS and Software segments, though Oracle Cloud Infrastructure (OCI) acceleration was highlighted as a bright spot in the company’s performance.

TD Cowen expressed encouragement regarding management commentary on Abilene timelines and noted that Oracle management remains committed to investment-grade debt levels and has flagged funding need caps.

The research firm believes these financial commitments should help ease some investor concerns about Oracle’s debt position and capital allocation strategy.

TD Cowen remains constructive on OCI’s expected growth trajectory, specifically noting the anticipated ramp to approximately 100% growth in the fourth quarter, and suggests that continued execution in this area could drive Oracle’s valuation higher.

In other recent news, Oracle’s second-quarter earnings results fell short of expectations, with cloud revenue missing the midpoint of guidance by 1 percentage point. Scotiabank responded by lowering its price target for Oracle to $260 from $360, maintaining a Sector Outperform rating. Despite these results, Guggenheim continues to view Oracle as its "Best Idea," reiterating a Buy rating with a $400 price target. Oracle plans to increase its capital expenditure by $15 billion, aiming to generate $4 billion in additional revenue next year. Cantor Fitzgerald adjusted its price target for Oracle to $320 from $400, citing concerns about AI infrastructure investments and higher financing costs. Meanwhile, William Blair reiterated its Outperform rating on Oracle, even as the stock experienced a significant drop. Morgan Stanley maintained its Equalweight rating and a $320 price target, noting pressures on Oracle’s gross and operating margins. These developments highlight varying analyst perspectives on Oracle’s financial outlook and strategic initiatives.

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