Analyst Says Oracle on Solid Track

Analyst Kirk Materne said a meeting with the Redwood Shores, Calif., company's management left him feeling positive about Oracle's risk-and-reward balance, which he said already takes into account the current economic state.

"While no software company is immune to a macroeconomic slowdown, Oracle remains upbeat relative to the size of its current sales pipeline," Materne said in a note to clients. He kept a "Buy" rating and $27 price target, implying he expects the stock to rise about 34 percent over Wednesday's $20.22 close.

Oracle's planned $8.5 billion takeover of BEA Systems Inc. will likely "add another leg of growth to the database business," he said. While company officials expect the deal to add 1 to 2 cents per share to fiscal 2009 earnings, it may boost profit by as much as 8 cents per share, Materne said.

A BEA deal would reduce redundancies, eliminate duel offerings and combing engineering resources in research and development efforts, he said.

In afternoon trading, shares of Oracle rose 32 cents to $20.54. Shares of San Jose, Calif.-based BEA added 3 cents to $19.22.