Sun To Rise On ORCL Next Week
Analysts at FBR Capital Markets reiterate their “outperform” rating on Oracle Corporation (NASDAQ: ORCL).
Oracle is scheduled to host an event on January 27 in which it will talk to customers, partners, the press and analysts about its strategy with Sun Microsystems Inc (NASDAQ: JAVA). The talks will revolve around the product roadmap for the combined entity and the benefits to customers. This development indicates a high probability of a favorable ruling from the European Commission.
The analysts mention in the research note, “We like the acquisition of Sun as it: (1) provides Oracle with an end-to-end system offering from storage to applications, (2) provides Oracle with some critical pieces of software (Solaris, Java, and MySQL), and (3) should be nicely accretive. Our main concern is that Sun is largely a hardware vendor, which introduces integration risk and a new operating model with lower margins. However, given Oracle's successful track record of integrating acquisitions and the strategic nature of this combination, we believe the pros outweigh the cons.”
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