Bernstein raised its price target for Oracle (NYSE:ORCL) to $147 from $144 per share, maintaining an Outperform rating on the stock in a note Tuesday following the company's latest quarterly earnings.
After the close on Monday, the company reported Q2 EPS of $1.34, $0.01 better than the analyst estimate of $1.33. Revenue for the quarter came in at $12.9 billion, missing the consensus estimate of $13.05 billion. Oracle's shares plunged following the results, currently down more than 12% at around $100.90 per share.
Analysts at Bernstein acknowledged that growth pains are continuing as the company strives to meet demand.
"Oracle delivered another mixed quarter, with strength on the margin and EPS side but weakness on revenue and cloud growth," the analysts said.
However, they acknowledged that the encouraging parts of the story are management acknowledging it takes time to build up capacity while reiterating their full-year cloud growth and capex spending guidance for the fiscal year, Larry Ellison, Oracle's chief technology officer, commenting on OCI growth bottoming and the reiteration of long-term FY26 guidance.
"It is important to recognize that first and foremost, the Oracle story is a Cloud story and especially an OCI Gen 2 story," stated the analysts. "Strategic Back Office is important for the business and the opportunity is large; margins are important as this is a value-centric company both from an investor and a management perspective; Cerner was important early on and will be again if the Cloud transition works but fundamentally investors are focused on the Cloud and especially OCI Gen 2 and therefore that has to be the core of any discussion."