Jefferies Reiterates Buy Rating On Oracle

In a report published by Jefferies, it is reiterating a Buy rating on Oracle ORCL. Jefferies said that it remains positive on ORCL and despite modest changes to its model to reflect Japan risk, it continue to believe EPS will surprise to the upside. “F3Q11 was an inflection Q for revenue contribution from Exadata, and we think there is upside bias to our hardware and database license ests. We are at the high end of the rev range and above the Street for this and next Q, so have left our ests unchanged. We also believe that our operating margin estimates remain conservative. Finally, with a low exposure to Japan (5% of FY10 rev), we think any negative impact to numbers will be modest. Our $37/share PT represents 15X our CY12 EPS est of $2.46 at the end of CY11. The multiple is a discount to our coverage group and reflects around 1X the growth rate of FY10-FY12 EPS, which conservatively remains below mgmt's 20% growth target. Risks incl. the pace of IT spend recovery, the integrated system strategy and potential large acquisitions.” Oracle closed yesterday at $30.76.