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Technology Stocks : Oracle Corporation (ORCL)

ORCL 262.61

+2.2%

Oct 31 9:30 AM EDT

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To: E_K_S who wrote (18970)	1/20/2011 3:28:01 PM
From: Sonki	of 19079

Piper Jaffray Comments On Oracle Investor Meetings By Benzinga Staff January 18, 2011 8:51 AM Symbols: ORCL Posted in: Analyst Color, Analyst Ratings Piper Jaffray has a $36 PT and Overweight rating on ORCL Share 0digg Email ArticlePrint Article Following Oracle's (NASDAQ: ORCL) investor meetings, commentary supports several core elements of Piper Jaffray's investment thesis, including: Oracle exudes very solid confidence in margins going higher and returning to historical highs, even with Sun in the mix; Exadata pipelines are building at a phenomenal rate; and the Street may be underestimating Oracle's ability to monetize its new Integrated Systems offerings. Piper walks away incrementally more confident in upward EPS revisions. Growth in recurring maintenance revenue pushes Software margins higher every year. Against this backdrop, Piper feels Oracle is in the "middle innings" in terms of Sun margin expansion. Sun gross margins stood at 48% when Oracle acquired it; have reached 53% currently, and is targeted to reach 60% as the turnaround progresses. Exadata systems cost roughly $1M. Larry Ellison recently said half of Oracle's 295K database customers could adopt Exadata within 5 years. While this forecast sounds aggressive to us, Piper notes that 147K customers times $1M would equate to a $147B revenue opportunity; even with a large haircut to the assumptions, the implications are profound. Piper speculates that Oracle could create an "Integrated Systems" sales team and/or a new revenue line for "Integrated Systems" Piper Jaffray has a $36 PT and Overweight rating on ORCL ORCL closed Friday at $31.25 Read more: benzinga.com

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