PeopleSoft's ( PSFT) revised offer for J.D. Edwards ( JDEC) represents an improvement over the last one, US Bancorp Piper Jaffray argued Tuesday in upgrading the shares to out-perform.

The brokerage said the shares' risk/reward profile is also improved by the likelihood that if Oracle ( ORCL) is serious about its buyout offer, it will have to raise it. Oracle is currently offering $16 a share

PeopleSoft's shares were up 25 cents, or about 1.5%, to $17 following the upgrade. On Monday, the company said it would make roughly half of its $1.75 billion offer for J.D. Edwards cash, a step Piper Jaffray said makes it more accretive for PeopleSoft.

"While we maintain our view that integration risks with J.D. Edwards clearly remain, the terms of the new proposal offer more room for error and accretion is very likely with the high cash component," the brokerage said.

The company's fundamentals, however, remain uninspiring.

"We believe that near-term uncertainty will cause some freezing in decisions in the market and accordingly are reducing our estimates for the June quarter," Piper wrote. It cut its estimate of expected license revenue to $80.3 million from $88 million, its total revenue to $453.5 million from $461.4 million, and per-share earnings to 11 cents from 12 cents.

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