BMO Capital raised its price target on Oracle (NYSE:ORCL) to $245 from $235 while maintaining an Outperform rating, as the firm expects the company’s significant capital expenditure requirements to impact free cash flow and potentially necessitate new capital raises in fiscal 2026 or 2027.
The analyst noted that Oracle’s ongoing dividend commitments and anticipated share buybacks, combined with rising capex needs—likely tied to cloud infrastructure and AI investments—could pressure cash flows. While BMO sees any capital raise as manageable, it cautioned that dilution from new financing could weigh modestly on EPS.
Despite this, the firm made only slight adjustments to its estimates and reiterated its bullish stance, arguing that Oracle’s growth prospects in cloud and AI continue to support a favorable risk/reward profile. The raised target reflects confidence in Oracle’s strategy and the durability of its business model even as it navigates near-term financial balancing.
