Oracle rises as Deutsche Bank says OpenAI-related gains not baked in
Shares of Oracle ORCL.N rise 3.6% to $204.3
Deutsche Bank estimates a $4 reduction in EPS to $17 and a $10 bln reduction in FCF to ORCL's FY30 guidance if OpenAI-related revenues and expenses are excluded
"Discounting these numbers back to present would suggest the company is getting little if any credit for its business with OpenAI at the current share price of ~$200," brokerage says
DB highlights ORCL's current P/E of about 27 times forward earnings is burdened by upfront costs in scaling the AI business, but real opportunity brought by OpenAI backlog should more than offset risks
The brokerage holds a "buy" rating on the stock with a PT of $375; 32 of 45 brokerages covering the stock rate it "buy" or higher
Including sessions' moves, ORCL up more than 22% YTD but off about 41% from its September peak
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