Oppenheimer recommended buying Oracle stock on the downturn. Why he expects them to grow by 25%

Investment bank Oppenheimer advised to seize the opportunity and buy shares of software developer and owner of cloud storage Oracle. The analyst believes that the recent sharp fall in the company's quotations has formed an attractive ratio of risk and potential returns for investors.

Oppenheimer analyst Brian Schwartz upgraded his recommendation on the securities of technology company Oracle from neutral to an "above market" (outperform) rating, equivalent to a "buy" recommendation. He also set a target price of $185 for the stock, CNBCwrites. That implies a potential upside of 25% relative to the last close.

Oracle's value is down 13% over the past 12 months and 25% since the beginning of the year, creating an attractive entry point, Schwartz said. "While our recommendation may be premature as the company will need time to demonstrate financial success in future reports as a more capital-intensive business, we see a favorable risk/return ratio after the stock's multiples have more than halved since September," he wrote.

The analyst called Oracle "a company with an outstanding ability to grow earnings per share," which should "catalyze improved investor sentiment and lead to further upside for the stock." In the baseline and optimistic scenarios, Schwartz expects earnings per share to double and triple by fiscal 2030, respectively.

At the auction on February 25, quotations of Oracle added 1.2%.

According to MarketWatch, 35 of 45 analysts tracking Oracle stock advise buying it. A month ago, the company had 33 such recommendations. Eight analysts took a neutral stance, and two analysts suggest selling these securities.

The Wall Street consensus price target is $274, which is 85% above the current value.

This article was AI-translated and verified by a human editor