Story updated at 10 a.m. to reflect market activity.
Orcale was gaining 0.2% to $41.05 in morning trading.
The firm raised its price target for the company to $47 from $38. According to Societe Generale analysts Richard Nguyen and Derric Marcon Oracle is leveraged to the database upgrade cycle.
"In our view, the current valuation reflects short-term risks, notably the transition to the cloud, but not yet the upside potential related to the upgrade cycle in the highly profitable database business," the analysts wrote."
Separately, TheStreet Ratings team rates ORACLE CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ORACLE CORP (ORCL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ORACLE CORP has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ORACLE CORP increased its bottom line by earning $2.26 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($2.91 versus $2.26).
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.6%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Software industry and the overall market, ORACLE CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- You can view the full analysis from the report here: ORCL Ratings Report