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Piper Sandler analysts upgraded Oracle (NYSE:ORCL) stock to Overweight from Neutral with a price target of $104 per share, up from the prior $85.
They see 2024 as a “watershed year” for Oracle, given that growth in operating profits and EPS could accelerate to more than 10%.
“Despite all the banter on cloud, the 1% CAGR in revenue and operating profits between F2012-F2022 made it easy to ignore ORCL. That may no longer be the case given Oracle Cloud could expand ~26% annually to reach $21.7B by F2025,” the analysts wrote in a client note.
The cloud transformation, in conjunction with a lower share count, could fuel EPS growth, the analysts added. As a result, they hiked their EPS estimates.
“We see room for both earnings and multiple expansion as the acceleration to double-digit EPS growth materializes,” they concluded.
This is the second upgrade for Oracle in just a couple of days after Jefferies raised their recommendation on the tech stock to Buy last week. The analysts argued that Oracle has “its mojo back.”
“We like the reacceleration growth theme, focus on expense scrutiny and cheap multiple. Tactical pick for value investors,” they wrote in an upgrade note last week.
Oracle shares are up over 1.5% today.
