Monness analyst Brian White has maintained their neutral stance on ORCL stock, giving a Hold rating today.
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Brian White has given his Hold rating due to a combination of factors surrounding Oracle’s current financial trajectory and strategic initiatives. While Oracle is making significant strides in the AI sector, with new innovations and partnerships, the ambitious revenue targets set by the company are expected to require substantial capital expenditures. This could lead to prolonged periods of negative free cash flow and an increase in debt levels, which introduces financial risks.
Furthermore, Oracle’s updated financial targets, despite being optimistic, suggest a high growth rate that may be challenging to achieve given the competitive landscape. The company’s plans for its cloud infrastructure and AI platforms are promising, yet the execution of these plans amidst rising expectations and financial commitments warrants a cautious approach. As a result, Brian White believes a Hold rating is appropriate until there is clearer visibility on Oracle’s ability to meet its ambitious goals without compromising financial stability.
In another report released today, Berenberg Bank also maintained a Hold rating on the stock with a $306.00 price target.