BEA Systems

was getting a lift Wednesday after Merrill Lynch raised its rating on the stock and added it to the research firm's Focus One list.

The firm now has a buy rating on BEA's stock and a $15 price target. Shares of BEA were climbing $1.12, or 9%, to $13.20 in afternoon



Merrill said in a research note that among the reasons for the upgrade were its renewed confidence in BEA's second quarter, an upcoming product cycle and the company's strategic value.

The WebLogic Platform 8.1 is technically sound, Merrill said, and the product "substantially improves" BEA's position in application development and integration, driving license revenue.

"While we are not looking for a material impact in July from the new products, our assumption is the company could reach the middle to higher end of the license revenue guidance of flat to up 5% sequentially from

the first quarter," Merrill said.

The firm raised its second-quarter license revenue estimate on BEA to $126 million.

For fiscal 2005, Merrill raised BEA's revenue estimate to $1.096 billion and its earnings estimate to 40 cents a share. The research firm previously expected a top line of $1.062 billion and a profit of 37 cents.

"The continuous acquisition chatter makes strategic sense given BEA's unique positioning; however, the timing/likelihood is somewhat of a wildcard," Merrill wrote.

Risks to its view on BEA include weak customer adoption of the new products, poor sales execution and pricing pressure from


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, Merrill said.