Brad Reback, a top analyst from Stifel, upgraded Oracle (ORCL) stock to Buy from Hold, citing optimism about the momentum in the company’s cloud business. The 5-star analyst significantly increased the price target for ORCL stock to $250 from $180, indicating about a 19% upside potential. Earlier this month, the cloud computing and database software company reported upbeat earnings for its fiscal fourth quarter, indicating that growth in its cloud business is expected to accelerate.
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Top Stifel Analyst Turns Bullish on ORCL Stock
Reback stated that the recent notable increase in Oracle’s capital expenditure and remaining performance obligations (RPO) gains reinforce management’s cloud (Infrastructure + SaaS-Apps) growth expectations. Furthermore, he anticipates that the strength in ORCL’s cloud business will accelerate the company’s overall revenue growth in the years ahead. Notably, he expects revenue growth to increase from 16% in Fiscal 2026 to about 20% in Fiscal 2027.
The analyst acknowledged that while the elevated capex is expected to weigh on the company’s gross margins in the near term, “there is no question this management team is extremely adept at managing expenses.” Reback believes that Oracle’s expense management, combined with a greater emphasis on physical infrastructure rather than people to generate new business, would help revenue increase meaningfully faster than operating expenses in the coming years.
Reback also highlighted that Fiscal 2025 headcount grew by only 2% and total operating expenses expanded by 5%, while total revenue increased by 8%. Overall, he believes that sustainable cloud growth and operating expense discipline would enable Oracle to overcome the revenue mix shift headwinds and deliver accelerating EPS (earnings per share) growth in Fiscal 2027 and beyond. Reback’s new stock price forecast of $250 indicates a P/E (price-to-earnings) valuation multiple of about 30x his revised Fiscal 2027 EPS estimate of $8.35.
Reback ranks 458th among more than 9,600 analysts on TipRanks. He has a success rate of 56%, with an average return per rating of 11.6% over a one-year period.
Is Oracle Stock a Buy, Sell, or Hold?
Prior to Stifel’s upgrade, Oracle scored a Moderate Buy consensus rating on Wall Street based on 21 Buys and 12 Holds. The average ORCL stock price target of $212.14 indicates that the stock is fully valued at current levels. ORCL stock has rallied more than 26% year-to-date.
