Oracle’s (NYSE:ORCL) Executive Vice President Doug Kehring expressed confidence in the company’s ability to achieve the targets set for Fiscal 2026. At the annual Oracle Cloud World conference held yesterday, ORCL reiterated its outlook of $65 billion in revenue, 45% operating margin, and at least 10% annual EPS growth by May 2026.
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Furthermore, the company has guided for 7% revenue growth in Fiscal 2024, which includes the contributions from the Cerner electronic health records business. Also, the adjusted operating margin is expected to reach 43%.
To meet its objectives, Oracle is bolstering its cloud offerings. The company is said to have entered into a $1.5 billion contract for cloud-based AI training services with one of the three major cloud computing giants, namely Amazon (AMZN), Microsoft (MSFT), or Alphabet (GOOGL).
The reaffirmed outlook was widely anticipated due to Oracle’s lackluster performance in the first fiscal quarter. Additionally, commenting on the decline in ORCL stock following the results, CEO Safra Catz said that the drop presents an opportunity for stock buybacks.
It is worth highlighting that following the conference, Jefferies analyst Brent Hill maintained his buy rating on the stock. He believes that the reiterated FY26 goals appear conservative, especially as cloud applications and Oracle Cloud Infrastructure (OCI) become a larger part of the company’s portfolio. Additionally, Hill finds the ORCL stock valuation attractive after the recent pullback in its price.
What is the Future of ORCL Stock?
Currently, Wall Street analysts are cautiously optimistic about the stock. ORCL stock has a Moderate Buy consensus rating on TipRanks based on 10 Buy and 12 Hold recommendations assigned in the past three months. The average stock price target of $130.07 implies 18.86% upside potential. The stock has gained about 32% so far in 2023.
