Morgan Stanley Overweight On Oracle

Morgan Stanley is out with a research report on Oracle (NASDAQ: ORCL) and it has an Overweight rating and a $36 price target on shares.

In a note to clients, Morgan Stanley writes, "A durable recurring base representing >50% of total revs and >75% of op. income will enable ORCL to sustain EPS in an uncertain macro better than most, in our view. The hardware biz is more cyclical than software, and we are reducing our ests. here. However, with >80% of overall op. income from the software biz, a 9% cut to our FY12 hardware rev. est. results in a just a $0.04 reduction in EPS. Heading into an uncertain environment in the back half of CY11, we believe ORCL has both the growth drivers to take share in a more positive demand environment (i.e. Exadata, Fusion Apps & Middleware cycle), and the earnings defensibility needed in a less favorable climate."

Shares of ORCL gained 48 cents yesterday to close at $26.68.