The Bullish Case For Oracle Corporation (ORCL) From BAML

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Oracle Corporation (NASDAQ:ORCL) receives a Buy rating from analysts at Bank of America Merrill Lynch (BAML), on the heels of its strong second quarter performance. Overall, the company reported 18 percent in quarterly earnings increases as businesses spent more on software and technology toward the year’s end.

The Bullish Case For Oracle Corporation (ORCL) From BAML

BAML analysts said the stock bounced back from a disappointing first quarter and has beat estimates. Cloud subscriptions and software licenses were up 18 percent, which was quite an increase over their expected 8 percent increase. Oracle Corporation (NASDAQ:ORCL) missed its estimate in hardware sales, although growth in the other two areas was enough to overcome that.

We reported on Tuesday about the increase in Oracle’s share price after its strong earnings report, and BAML analysts believe that report has given the company “positive momentum” that will carry it into fiscal year 2013. For the company’s February quarter, BAML expects a 5 percent quarter over quarter growth in software licenses, although they caution investors about the possible fiscal cliff and the seasonally slow quarter. They also lowered their hardware estimates but increased their earnings per share estimate just slightly.

The company has had a strong start in December, and BAML analysts believe the company will continue growing. They have set their price objective at $38 and expect the company’s newly acquired cloud services to drive its revenue growth into the next fiscal year.

Shares of Oracle Corporation (NASDAQ:ORCL) rose steadily on Tuesday and continued rising in pre-market trades on Wednesday, adding another 2 percent to the stock’s value. Shares are now just under $33 each.

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