On Tuesday, Morgan Stanley maintained its Equalweight rating on Oracle Corporation (NYSE:ORCL) but increased the price target to $115 from the previous $106. The firm acknowledged Oracle's potential for revenue growth, particularly noting the opportunities in Oracle Cloud Infrastructure (OCI), existing database customers, and cloud-based Enterprise Resource Planning (ERP) applications.
Oracle's recent moves have attracted attention, with the acquisition of Cerner (NASDAQ:CERN) and a strategy that appears to be slowing down its pace of share repurchases. These developments have led to questions about the future earnings per share (EPS) growth for the company. Despite these concerns, Morgan Stanley has shown a cautiously optimistic outlook on Oracle's revenue prospects.
The updated price target reflects a balance between the positive aspects of Oracle's business and the uncertainties that remain. The firm pointed out that while there are opportunities for Oracle to capitalize on, there are also outstanding questions regarding the migration of the installed base and the impact on profit margins.
The analyst from Morgan Stanley emphasized the firm's position by stating:
"While incrementally more positive on the trajectory of top-line growth at Oracle, given outstanding uncertainties surrounding installed base migration and margins, we remain Equal-weight with a price target of $115."
Investors and market watchers will be keeping an eye on Oracle's performance, especially in relation to how the company navigates the challenges and opportunities ahead. The new price target suggests that there is a level of confidence in Oracle's ability to grow, but it also signals caution due to the potential hurdles the company faces.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.