Oracle Trading forecasts and signals

The market the day beforeThe session on June 14, the main American stock exchanges ended mainly in the red zone. The S&P 500 declined by 0.38% to 3,735 points, the Dow Jones adjusted by 0.50%, the Nasdaq added 0.18%. Technological (+0.62%) and energy (+0.07%) looked better than the market. The outsiders were utilities (-2.58%) and issuers from the cyclical consumer goods industry (-1.29%).Company newsFedEx Corporation (FDX: +14.41%) increased its quarterly dividend by 53% and announced a change in the composition of the board of directors.Oracle Corporation's revenue (ORCL: +10.41%) for the 4th fiscal quarter increased by 5% YoY, the company increased quarterly dividends by 19%.The FDA Advisory Committee approved Moderna Inc. (MRNA: +3.78%) vaccines for the prevention of COVID-19 in children and adolescents aged six to 17 years.We expectToday, during the Fed meeting, the regulator will decide on the new value of the target interest rate. Taking into account the consumer inflation data released on June 10, which exceeded general market expectations, some uncertainty remains about the extent of monetary policy tightening. Inflation accelerated to 8.6% YoY, which may lead to a more aggressive rate hike by 75 bps at once against the previously expected 50 bps. However, this scenario, apparently, is already reflected in the current quotations of equity securities, as evidenced by the negative dynamics of the indices during the last two trading sessions. An important factor that will determine the further dynamics of stocks will be not only the regulator's decision on the rate, but also the Fed's assessment of the inflation situation. It is possible that the long-term benchmark may be increased from the current 2%.The yield of 10-year treasuries compared to yesterday's session fell by 5 bps, to 3.43%, two—year securities - by 6 bps, to 3.36%. The indicator for 30-year bonds reached 3.43%.The auction on June 14 at the sites of Southeast Asia ended mainly in the green zone. Japan's Nikkei 225 declined by 1.14%, Hong Kong's Hang Seng rose by 1.15%, and China's CSI 300 rose by 1.32%. EuroStoxx 50 has been adding 0.85% since the opening of the session.Brent crude futures are quoted at $121.49 per barrel. Gold is trading at $1,821 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3700-3750 points.MacrostatisticsToday, US retail sales data for May will be published, which will allow us to assess the dynamics of consumer demand. The consensus assumes an increase in the sale of goods of the control group by 0.8% mom (after +0.6% in April).Sentiment IndexThe sentiment index dropped two points to 31.Technical pictureThe S&P 500 continues to decline towards the lower boundary of the descending channel, the penetration of which may provoke a further sharp drop. The MACD does not signal a reversal, the RSI is also in the neutral zone. However, most likely, technical factors will fade into the background due to the influence of fundamental aspects related to the Fed ...

Software manufacturer Oracle reported a profit of $3.2 billion ($1.16 per share) in the 4th reporting quarter, compared with $4.03 billion ($1.37 per share) a year earlier. Operating profit was $1.54 per share. Revenue for the reporting period increased from $11.23 billion to $11.8 billion. Expected earnings of $1.37 per share on revenue of $11.6 billion. Revenue from cloud and local licenses increased by 18% to $2.5 billion. The company's financial results exceeded expectations.Oracle shares on the NYSE premarket on June 14 are growing by 13.93%, to $72.97 per ...

The market the day beforeThe session on June 13, the main American stock exchanges ended in the red zone. The S&P 500 fell 3.88% to close at 3,750 points. Nasdaq dropped 4.68%, Dow Jones lost 2.79%. All 11 sectors included in the broad market index closed in negative territory. The worst sectors were energy (-5.13%) and real estate (-4.78%).Company newsAfter the end of the main session on the eve of Oracle (ORCL: -4.6%) presented a quarterly report in which it recorded adjusted earnings per share of $1.54 on revenue of $11.8 billion. This exceeded the consensus, which laid these indicators at the level of $1.38 and $11.65 billion, respectively.Medical equipment manufacturer ResMed Inc. (RMD: -2.94%) will buy MEDIFOX DAN GmbH, a German healthcare software provider, for $1 billion to expand its software-as-a-service (SaaS) business outside the United States.We expectSince June 12, mandatory COVID-19 tests for foreigners arriving in the country have been canceled in the United States, which was the result of intensive lobbying by airlines on the eve of the high tourist season. At the same time, the State authorities noted that if the sanitary and epidemic situation worsens, the relevant requirements may be re-introduced.The auction on June 14 on the sites of Southeast Asia ended in different directions. China's CSI 300 added 0.79%, Hong Kong's Hang Seng dropped by a symbolic 0.07%, Japan's Nikkei 225 fell by 1.32%. EuroStoxx50 has been growing by 0.4% since the opening of the session.Brent crude futures are quoted at $123 per barrel. Gold is trading at $1,830 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 3730-3830 points.MacrostatisticsToday, data on the dynamics of the producer price index for May will be published (forecast: +8.6% YoY after +8.8% YoY in April).Sentiment IndexThe sentiment index dropped two points to 33.Technical pictureThe S&P 500 continues to actively adjust, and its futures have approached local support in the area of 3750-3800 points. At this point, the correction of the broad market index may slow down, since it has reached the lower limit of the designated channel. The RSI has reached the oversold level, which may portend a short-term rebound in quotations, nevertheless, the MACD does not signal a ...

Software maker Oracle has overcome the latest regulatory hurdle for the upcoming acquisition of Cerner for $28.3 billion. The deal is due to close next week.Oracle said it had obtained the necessary antitrust approvals for the deal, including the approval of the European Commission. As a result of the transaction, Cerner is valued at $95 per share – this is the largest acquisition of Oracle in the history of the company and one of the largest acquisitions this year.We are talking about the merger of two corporations operating in the same industry, but in different segments: Oralce produces business software, and Cerner also produces software, but designed for the functioning of electronic medical records. The European Commission did not raise any questions about the future deal.With this deal, Oracle is integrating deeper into the healthcare market. In the United States alone, this segment is $3.8 trillion, and the company plans to expand Cerner's business in international markets.Oralce shares rose 2.15% on June 2, to $73.14 per ...

About the companyDigital Realty Trust, Inc. (DLR) operates as a real estate investment trust (REIT). The company supports the world's leading enterprises and service providers by providing a full range of solutions for data centers, hosting and connectivity. PlatformDIGITALR, the company's global data center platform, provides customers with a reliable foundation and a universally proven PDxTM architecture to solve the challenges of scaling digital business and effectively managing data scaling. As of December 31, 2021, DLR's asset portfolio consisted of 287 data centers, of which 127 are located in the USA, 107 in Europe, 27 in Latin America, 13 in Asia, 6 in Australia, 4 in Africa and 3 in Canada.Investment attractiveness factors1. In conditions of high inflation and declining consumer confidence, real estate is one of the most popular and safe investment tools, especially if it is infrastructurally significant objects: DLR among direct competitors, such as Equinix, Inc. (EQIX), DigitalBridge Group, Inc. (DBRG) and the recently absorbed CyrusOne Inc., has the most a large portfolio of assets (data centers) both in terms of quantity and cost. Large corporations will continue to digitize their business and move to the cloud, which will support the company's sustainable long-term prospects. And here it is worth noting the current lower rental rates as one of the advantages of DLR: even taking into account the incomplete comparability of the metrics calculated by competitors, the company has a relatively lower specific indicator of the weighted average rental rate per square foot, which allows it to have a higher percentage of use of existing premises, attract new and retain existing large customers, which include:International Business Machines Corporation (IBM) – 4.1% in revenue;Oracle Corporation (ORCL) – 3.4% in revenue;Meta Platforms Inc. (FB)* – 3.1% in revenue;and even a competitor in the person of Equinix, Inc. (EQIX) – 2.6% in revenue.2. The company has lower multipliers:P/B is 2.4x (industry average 2.8x);P/FFO (Price to Funds From Operations) is 20.6x (industry average 36.7x).The EBITDA margin remains close to the industry average of 54.3%. But in terms of debt, DLR is in a better position: LT Debt/Equity is 82.7% with an industry average of 115.5%. High EBITDA and relatively low debt burden emphasize the high degree of liability coverage.3. Such a form of a company as a REIT involves regular dividend payments. The potential dividend yield of DLR shares is 3.5%. Relative to the REIT market, this is not the highest level, but it is the highest relative to direct competitors. It is also worth noting that the company regularly raises the level of ...

Oracle shares are trading 25% below the maximum marks of 2021. The papers of the old-timers of the technological sphere are especially interesting in the current conditions, when younger representatives of the industry are seriously losing due to a change in investor sentiment. Oracle's capitalization suffered for two reasons at once: the general correction of technology players and the announcement of the purchase of Cerner for a huge $28.3 billion.Cerner is not only an established company, but also a prominent representative of the promising medical market. According to the head of Oracle, this transaction will allow to start expansion in a new direction and will have a positive long-term impact on revenue. In other words, buying Cerner will not only immediately increase revenue, but also give fresh strength to accelerate growth.Like many other corporations, Oracle is moving its headquarters from San Francisco to Texas and implementing a flexible, remote work format, which will significantly reduce costs.Another pleasant moment for investors is that Oracle is actively spending on buying shares from the market. To date, only 46% of all papers are in the public domain. While startups issue new shares to finance M&A deals, Oracle, in fact, makes payments to its shareholders. Recently, management decided to allocate an additional $10 billion to buy back shares. This is about 5% of the capitalization size. The forward P/E coefficient is 15. The operating margin is 47%, and EPS is $1.21 (+14% ...

On Monday, December 20, Oracle (NYSE: ORCL) announced the acquisition of Cerner (NASDAQ: CERN). The amount of the transaction, which is expected to be completed next year, is defined as $95 per share, or approximately $28.3 billion in total. Oracle plans to pay this amount in cash.Cerner is a leading provider of digital information systems for medical institutions, including integrated clinical, financial and management software. A key element of the product line is an electronic system of medical records, including electronic patient records.The company has cloud services (the HealtheIntent platform), but it does not disclose data on the share of SaaS solutions in the sales structure. About 77% of Cerner's revenue is generated through the provision of professional services, support and hosting.The approval process of the transaction may be delayed due to the increased control of antimonopoly authorities of M&A activity in the IT sector. At the same time, we believe that permission for the takeover will be obtained, since with the purchase of Cerner Oracle will enter a new sub-segment of the market for itself. At the same time, it is possible that some Cerner products, including financial software, may go to a third party.We are neutral about the upcoming deal. Cerner operates in a slowly developing market (EHR or EMR), the forecast assumes its annual growth of only 5% in the next five years. According to mordorintelligence.com and other open sources, EHR is a highly concentrated segment. The top three of its member companies occupy more than 70% of the market, which calls into question the prospects for expanding the share of the current leaders' presence in it. According to healthleadersmedia.com and beckershospitalreview.com Cerner's share declined in 2019 and 2020, while its key competitor Epic expanded its presence in the market. Today Epic owns 31% in the EHR segment, Cerner - 25%, Meditech - 16%, Allscripts - 5%.We have a negative attitude to the fact that Oracle has been increasing its debt load over the past few years, and in order to absorb Cerner, the corporation will have to increase its borrowing by another $15-20 billion. At the same time, we consider the profitability of Cerner to be a positive aspect of the upcoming transaction, despite the relatively small scale of operations. Its GAAP margin at the end of the year, the consensus forecast of Factset lays at the level of 12.4%. However, in recent years, the profitability of the company has been declining. Perhaps joining Oracle will lead to an increase in the marginality of Cerner due to economies of scale. At the same time, there is no reason to expect pronounced synergy or significant impact of cross-selling.We believe that Oracle's focus on creating cloud products, including IaaS, as well as the resumption of M&A transactions signals that the company has abandoned creating value for shareholders solely through share buybacks. We evaluate this decision positively. In addition, subject to the conclusion of the transaction, Cerner is likely to abandon AWS IaaS solutions in favor of Oracle's cloud product, which will also have a positive effect on its sales.In our opinion, the regulators will allow the transaction, so we take into account the purchase of Cerner in Oracle's future cash flows. The target price of its stock is $102.1, the recommendation is ...

Oracle Corp. works in a corporate environment with information technology in the following business segments: Cloud and License, Hardware and Services. The "Cloud and License" segment is engaged in marketing, sales and delivery of applications.The Hardware segment deals with servers, data storage systems, and industry equipment. The "Services" segment is engaged in consultations, provides support to clients. Oracle spends a significant portion of its free cash flow on buybacks.Now the company's shares are growing, but their dynamics in the future will depend on successful competition with another leader in the field of cloud technologies – Amazon.com . In recent years, the issuer has been developing cloud services, while simultaneously updating all equipment. In 2021, the growth of Oracle Corp. accelerated amid increased demand for Fusion and NetSuite ERP services.In the 2nd quarter of fiscal year 2022, the company's revenue increased by 6% year-on-year, and reached $10.4 billion. The growth was due to an increase in revenue from cloud services and license sales. It should be noted that the sales growth of cloud infrastructure and applications exceeded 22%. Total revenue from cloud technologies amounted to $10 billion. In September 2021, we recommended purchasing this paper with a goal of $97.Oracle shares reached the target level in October 2021, after which they rebounded to the support of $88. After the release of a successful report for the 2nd quarter of fiscal year 2022, the issuer's shares soared to the area of $ 106. Now the asset is declining, and while the price is below the $100 level, it's too early to talk about purchases. Nevertheless, it is worth waiting for the resumption of the rally and the market movement towards ...

Oracle Corporation is one of the largest software developers and suppliers of server installations in the world. The company is engaged in hardware and software, as well as various related services.Oracle management has divided its activities into the following segments:The cloud and license sector, which specializes in the sales and supply of various infrastructure platforms and technologies.The hardware sector, which deals with software and hardware products, such as Oracle Engineered Systems. This also includes the OS, virtualization software, storage systems, and hardware support.The service sector, which is responsible for consulting and educational support for clients.Oracle's revenues have slowed in growth due to noticeable competition, but shareholders remain in the black. Over the past year, the issuer's shares have risen by 50% and by 140% in annual comparison. A large-scale share buyback in 2011 provoked the growth of securities.Since 2009, the corporation has been regularly paying dividends, which are growing. Since the beginning of this year, they have increased from $0.96 to $1.28Read more: Dividends: what is it and how to get themDevelopmentOver the past five years, Oracle has been actively developing in the field of cloud technologies. The company's management believes that the so-called “completeness” of the offer makes them out of competition. The company has not only applications and platforms, but also a favorable infrastructure.All this, together with a huge experience, gives the issuer the opportunity to succeed in corporate software in the direction of cloud computing. According to the results of the 4th quarter of this year, the company's management decided to allocate about $4 billion for the 2022 financial year in this direction, which is twice as much as a year earlier.Representatives of Research and Markets published the results of a study according to which the average annual growth rate of spending on cloud services in the world will be 18%. Representatives of Kinsta cloud hosting claim that Oracle has only 6% of this market, so there is a lot to grow, despite strong competition.When companies such as Amazon AWS and Microsoft Azure were already known for their cloud integrations, Oracle was just beginning to develop in this direction. Today, the issuer can compete with IBM and its Red Hat hybrid cloud, which makes it possible for both private and public cloud systems to interact.Oracle's management plans to develop in data centers, which increases the corporation's capital expenditures to $ 4 billion. But this step should stimulate the development of the company's cloud business.Reasons to buy Oracle sharesStability of the level of operating profitabilityExcluding GAAP, Oracle's operating margin has remained at 44% for the past 2 years. According to the results of the first half of this year, it increased by 4% year-on-year, reaching 46%. This happened due to a reduction in operating expenses.The growth of the indicator indicates that the company does not allocate large amounts for the conversion process to the cloud environment, and that it is able to influence the cost of corporate software at a competitive level.BuybackAccording to experts, the company made the last share repurchase in order to increase profit growth by 1 share due to unchanged revenue.On the one hand, this is true, but on the other, Oracle's buyback began with the aim of reducing the surplus of securities on the exchange. This goal was achieved by 41%.If the issuer continues the process of repurchasing shares together with stable sales growth, its profit may grow by 13% this year and by 7% next year. This will enable the issuer to succeed over its competitors. It is worth noting that IBM is not able to achieve the same despite the active buyback process.Dividend paymentsOracle trades on the market with a fourteen-fold forward profit and pays forward dividends of 1.5% on an ongoing basis. A low payout ratio of 28% gives the company an opportunity for future development, despite the fact that payments have not been organized since the beginning of the coronavirus pandemic.Financial securityIssuers with a stable financial flow and balance sheet are the best thing for an investor during a crisis in the market. Oracle had the opportunity to generate $12.1 billion of free financial flow over the past year. According to the results of the last quarter, the cash cushion amounted to $28 billion. There were more than $10 billion in outstanding shares.That is, the corporation has enough funds to implement all business processes, despite the crisis.Quarterly reportAccording to the results of the last quarterly report, it became known that Oracle's revenue amounted to $11.23 billion, and adjusted earnings per share reached $1.54. Both indicators exceeded analysts' expectations.Read more: EPS: about Earnings per Share with examples in simple wordsOracle management called these results outstanding, taking into account the development of Fusion and NetSuite cloud applications.The first company specializes in ERP systems of cloud technologies, and the second in CRM, as well as ERP, PSA and E-commerce.At the end of the 3rd quarter, Fusion ERP showed an increase of 30%, and at the end of the 4th quarter by 46%. The CRM direction of Fusion HCM grew by 23% and 35% in the 3rd and 4th quarters, respectively. NetSuite's growth was 24% and 26% in Q3 and Q4, respectively.The accelerated growth of the entire infrastructure of the corporation affected the growth of profit per security in the current financial year to 21%.Oracle's cloud services segment grew by 8% year-on-year, reaching $7.4 billion, which exceeded forecasts.Oracle shares: to buy or to sellThe very direction in which Oracle is known is promising and large, despite not even a huge number of existing competitors.Experts believe that the company's shares will attract the attention of market participants, however, now they are overbought, so you should only count on a slight increase. The asset should retreat a little to continue its growth from the side channel of 88-90 dollars.Analysts predict a decline in Oracle securities to the $82 mark and a return to growth only after ...

Let's just say that oracle is not the strongest paper in the technology industry. The issuer has been building software for businesses for 40 years, showing weak sales growth compared to giants such as Amazon and Microsoft. Oracle executives are often criticized for often organizing buyouts rather than expanding their core business.Relatively Everything. Yes, compared to tech mastodons like apple and Amazon, Oracle's profits are small, while Oracle's DBMS share has grown 75% over the past 5 years, and total corporate profits, including reinvested dividends, have been around 90%. Note that this company is considered more resilient than other aging tech giants like IBM and others.A few words about the company and its business. Oracle Corporation, based in the United States, is a major server hardware and software company. The company specializes in database management systems, middleware, and business applications. The most famous is the Oracle Database software, which the company has published since its inception.The company operates in three main segments.1st segment of cloud and on-premises software. In this segment, the company develops such areas as the SaaS solution (software as a service), PaaS models (platform as a service), IaaS, infrastructure as a service (cloud structure as a service), as well as software license renewal and product support.Hardware segment. In this segment, the company is active in two areas: the development of hardware products and their support.Service segment. This segment includes a wide range of services, such as support, advice, training, etcThe secret of the company's successThe company posted impressive growth figures in its recent earnings report as the pandemic set low payouts for 2020. While experts say the transition from Oracle to the cloud is slow, the tech giant is reaping the rewards of its acquisitions and investments. Its shares are still trading at a moderate P / E ratio of 17, with more than $ 37 billion in cash.What is the secret of the company's success? First, Oracle has moved its enterprise software to cloud services. The transition proved difficult, but the expansion of cloud services driven by major acquisitions such as NetSuite eventually offset slower growth in on-premises software sales.Second, Oracle spent most of its free cash flow (FCF) on the repurchase, not the dividend. Over the past decade, the issuer has reduced its shares by almost 42 percent, which has steadily increased earnings per share and the share price.Read more: EPS: about Earnings per Share with examples in simple wordsWhy does the company buy up cloud servicesOracle, like IBM and other older software companies, has reached its limits over the past few decades. The market was divided, and nothing seemed to change the balance of power. Everything changed with the advent of the SaaS service. The new service immediately became widespread, it is easy to install, update, configure. The emergence of SaaS destroyed the old business structures and drew the line "before" and "after".This paradigm shift has forced the old tech giants to play by new rules. Some companies, such as Microsoft, have been successful. Others, such as IBM, have failed. The transition to the Oracle cloud was more successful than IBM, but less impressive than Microsoft.The turning point for Oracle was the migration of the on-premises database and enterprise software to the cloud, as well as the acquisition of cloud-related companies.Gradually, Oracle's revenue began to grow. So, in the first half of the 2021 fiscal year (which began in May last year), this indicator increased by 2%. The expansion of cloud services compensated for the slowdown in local operations. In the new financial year, experts expect an increase in revenue by 3%.Stable operating profitability OracleOracle's non-GAAP operating margin remained unchanged at 44% in fiscal years 2019 and 2020. In the first half of 2021, it increased from 42% to 46% year-on-year, as operating expenses fell by 5%.This margin increase shows that Oracle is not spending too much money on moving to the cloud, and that this continues to affect prices in the enterprise software market.Oracle buys back its sharesExperts often say that the repurchase of shares of Oracle, on which the company spent 100% of free cash flow over the past 12 months, was used to increase the value of the shares against the background of low profits.Of course, the Oracle share buyback was also necessary. Thus, over the past 10 years, the issuer has reduced the number of shares issued by it by almost 42%. This approach has proven successful compared to other technology companies, which have often used buybacks to avoid diluting capital by issuing new securities.According to analysts, if Oracle continues to buy back its shares and supports sales growth, it can increase the company's profit by 13% in 2021 and by 7% in 2022. By comparison, IBM, which has reduced share buybacks over the past two years, is still struggling with declining profits and losses.Read more: Dividends: what is it and how to get themBuy or sell Oracle shares?Oracle is trading at 14 times forward earnings and is ready to pay a dividend of 1.5% per annum. Dividend payments have remained unchanged over the past two years, but this low payout rate of 28% gives the issuer the opportunity to start increasing them in the future.Such a low valuation and decent profitability make this company attractive for investment, especially if rising US interest rates and other macroeconomic factors force investors to abandon more expensive shares of technology companies.This does not mean that the oracle is an ideal investment document. The company has questions, but they intend to solve them. This company is focused on growth and easily overcomes any financial crisis. We think that from time to time it is worth betting on a marathon runner, not a sprinter, and investing in oracle is exactly what you need.Overall revenue growth accelerated to 3% in recent months, compared with 2% growth in the last two quarters. That figure was $10.1 billion, against expectations of $10.07 billion.The company is opening new data centers to strengthen its position in competition with cloud computing leaders Microsoft, Amazon and Google.Slowly but surely, it will achieve all its goals, which makes these stocks a good choice for a long-term investment.Shares of this company with short stops and pullbacks have been steadily growing since January. The latest growth momentum has just ended. Buyers did not have enough strength to capture the level of $84.70. The asset retreated to the level of $83.00 and now wants to grow again.If we look at the history, we can see that long pullbacks are not typical for this paper. We suggest buying the company's shares from the current levels with a medium-term goal of around ...