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09/15/17 04:00:00 PM
MARKET MOVERS

Movers: Oracle Corporation, Oracle Corporation

Oracle Corporation(ORCL) : Oracle Corporation (NYSE:ORCL) shares fell 7 percent despite recording a first quarter earnings beat. Wells Fargo noted that nothing about the quarter has changed the bank's conviction that Oracle can return to double-digit EPS in FY2018-2019. Shares fell mostly on weak guidance, in the 2-4 percent range, that Oracle announced on the earnings call. "Despite investors' concerns, we believe Oracle is positioned to successfully and profitably transition its dominant, high-margin on-premise business to the cloud," said Wells Fargo analyst Phillip Winslow. Wells Fargo maintained an Overweight rating with a $62.50 price target. Meanwhile, Brad Zelnick of Credit Suisse outlined positives and negatives from the quarter. What Credit Suisse Liked Strongest organic revenue growth since first quarter of 2015 Support revenue expected to be positive throughout the year License revenue beat consensus estimates What Credit Suisse Liked Less Cloud revenues were guided below street estimates Platform as a service ticked down in the quarter but is expected to exit the year improving Transitionary quarter if not for FX benefits Analysts at Credit Suisse maintained an Overweight rating on Oracle with a $62 price target. Related Link: The Core Reasons To Buy Oracle Haven't Changed Image Credit: By Travelarz - Own work, CC BY-SA 3.0 pl, via Wikimedia Commons



Oracle Corporation(ORCL) : Despite a more than 5 percent decline in Oracle Corporation (NYSE:ORCL)'s stock in reaction to its earnings report, the longer-term bullish case for owning the stock remains unchanged, according to analysts at Bank of America. The firm's Kash Rangan maintains a Buy rating on Oracle's stock with an unchanged $62 price target. Oracle's earnings report came in better than expected, but investors were concerned with Oracle's cloud revenue guide for the fiscal second quarter, the analyst noted. Specifically, the company's guide at the midpoint implies a 43 percent growth, which is short of the 48 percent expected. This could be attributed to the inclusion of Netsuite's business, which is causing "optics in the numbers" as Oracle has yet to disclose Netsuite's expected contribution so the Street may have been over-estimating SaaS organic growth figures. Meanwhile, Oracle's earnings as a whole demonstrated why investors should remain confident in the long-term story, Rangan said. The analyst highlighted several reasons, including: License fell just 7 percent versus expectation for a 14 percent decline. Fourth consecutive quarter of operating income growth. Cloud ARR bookings rose 40 percent and cloud deferred revenue rose 53 percent. SaaS cloud gross margins improved from 59 percent last year to 66 percent. Growth in the apps business accelerated from 8 percent last year to 17 percent. Bottom line, these catalysts are expected to help Oracle deliver a mid-single digit software revenue growth rate and a double-digit earnings per share growth rate going forward. Related Links: 5 Biggest Price Target Changes For Friday 5 Stocks To Watch For September 15, 2017 Image credit: Tim Dobbelaere from Ieper, Belgium (Oracle Databases Uploaded by Flominator), via Wikimedia Commons



 

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