Oracle Prices Notes Worth $15B; Street Sees 12% Upside


Oracle announced the pricing of its sale of $15 billion worth of investment grade notes. The company stated that the notes would be issued in six tranches of different maturities carrying different interest rates.

Oracle (ORCL) intends to use the net proceeds from the offerings for general corporate purposes including repayment of debt, fund acquisitions, dividend payments and share repurchases.

The company said that the interest will be paid semi-annually on March 25 and Sep. 25. The offering is anticipated to settle on March 24. (See Oracle stock analysis on TipRanks)

Earlier this month, Oracle delivered better-than-expected 3Q results. Adjusted EPS of $1.16 a share handily surpassed the Street’s estimates of $1.11, while revenues also fared better than analysts’ estimates. However, its revenue growth rate and outlook failed to impress.

On March 22, Evercore ISI analyst Kirk Materne reinitiated coverage on Oracle with a Hold rating and price target of $66 (0.5% downside potential). Materne believes that the company is well-positioned in the applications market and expects its cloud and apps businesses to depict more consistent growth in the coming quarters.

Overall, the Street has a Moderate Buy consensus rating on the stock based on 9 Buys, 9 Holds and 1 Sell. The average analyst price target of $74.38 implies upside potential of about 12.2% to current levels. Shares have gained about 45.3% over the past year.

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