12:12 PM EST, 12/05/2024 (MT Newswires) -- Oracle's (ORCL) "risk/reward tradeoff" is leaning "negative" ahead of its fiscal Q2 report, primarily due to high expectations for Oracle Cloud Infrastructure, RBC Capital Markets said in a report Thursday.

The analysts said they believe "the setup is tricky, and remain on the sidelines ahead of results."

"We expect Oracle to report slight upside relative to consensus expectations in line with [fiscal Q1] outperformance," which translates to 10% year-over-year growth, RBC said, adding that it expects adjusted EPS of around $1.50, which would exceed expectations, aligning with recent average beats.

Oracle's OCI cloud revenue is expected to grow 24% year-over-year. However, OCI consumption revenue growth is expected to decelerate, potentially leading to a mismatch with expectations.

The company is due to report fiscal Q2 results on Dec. 9 after the market closes.

RBC maintained its sector perform rating on Oracle with a price target of $165.

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