NEW YORK (TheStreet) -- Shares of Oracle (ORCL) are rising, higher by 2.13% to $40.80 in pre-market trading Monday, after the company had its rating raised to "overweight" from "equal weight" by analysts at Morgan Stanley this morning.
Analysts at the firm also raised its price target to $50 from $45, citing the combination of "improving results in secularly important portions of the business against very low expectations and weak sentiment."
Morgan Stanley noted that the upgrade is not a call on Oracle's second quarter earnings, and does not claim to have any real visibility into quarterly results.
Oracle is scheduled to post its fiscal second quarter earnings on Wednesday after the market closes.
Redwood City, CA-based Oracle is a provider of enterprise software and computer hardware products and services
Separately, TheStreet Ratings team rates ORACLE CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate ORACLE CORP (ORCL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- ORCL's revenue growth trails the industry average of 27.3%. Since the same quarter one year prior, revenues slightly increased by 2.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for ORACLE CORP is currently very high, coming in at 82.31%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.40% is above that of the industry average.
- ORACLE CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ORACLE CORP increased its bottom line by earning $2.39 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $2.39).
- You can view the full analysis from the report here: ORCL Ratings Report