Oracle: BMO Capital Ups Rating; See Better Enterprise Spending

Oracle shares are inching modestly higher after BMO Capital analyst Karl Keirstead upped his rating on the software giant to Outperform from Market Perform based on his view that "the top-line growth outlook has improved materially.

Keirstead upped his target price on the stock to $43, up from $36.

"Bottom line, we conclude that enterprise data software spending is improving after a rough 2012 and that demand for engineered data appliances is now broad enough that Exadata sales will have a discernable impact on Oracle’s overall growth rate in 2013," Keirstead writes in a research note. "Rival SAP appears to be backing off its 2015 database target, Oracle is at least fighting back in the cloud application market, and we believe the worst of the hardware declines are behind us. Coupled with continued margin gains, we believe that the likelihood of EPS upside is high and that at just 13x non-GAAP EPS, Oracle shares represent compelling value even after the recent run from $30 to $35."

ORCL is up 48 cents, or 1.4%, to $35.99.