JPMorgan Downgrades Oracle to Neutral

JPMorgan Downgrades Oracle to Neutral
(Updated - September 13, 2023 4:44 AM EDT)

JPMorgan analyst downgraded Oracle (NYSE: ORCL ) from Overweight to Neutral with a price target of $100.00 (from $112.00).

The analyst comments "We think the presence of a resilient, sticky, and largely recurring revenue stream with relatively low viability risk (compared to airlines, hotels, energy, restaurants, retailers, etc.) positions Oracle well to relatively outperform in a post-pandemic environment, and it could be a beneficiary of rotation into value as a relative safe haven within the software sector. Key considerations: 1) Oracle should continue to benefit from a favorable mix shift in the business (Cloud Apps, OCI, and Strategic hardware are growing faster and becoming a larger portion of the business, while declining businesses become a smaller portion); 2) >70% of Oracle’s total revenue today is recurring/renewable (including maintenance), adding resiliency to the model; 3) continued discipline in operating expenses along with durable pandemic-induced savings (lower travel and more remote work post pandemic, less real estate footprint, more employees in lower cost geos) could continue to drive operating profit growth above revenue growth."

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