Morgan Stanley Maintains Overweight on Oracle (ORCL)

Morgan Stanley is out with its report today on Oracle ORCL, maintaining Overweight. In a note to clients, Morgan Stanley writes, "A core tenet of our positive thesis on ORCL is that after Sun surprised favorably in CY10, core ORCL software will be the driver of upside in CY11. Constant currency lic. accelerated to 27% YoY, and +20% organically on the back of an inflection in applications, strength in middleware and the return of large deals. Margins again exceeded our target by 150 bps, putting ORCL on track to return to historical margins faster than expected. While hardware declined seq. and missed consensus expectations, we know this bus. is the hardest to turn and is not material to eps. With growth accelerating, estimates moving higher and the stock cheap at 12-13x, we remain buyers." At the time of posting, shares of ORCL were trading pre-market at $33.65, up 4.70% from Thursday's close.