Oracle 'Compelling Valuation' As Enterprise IT Spend RisesOracle 'Compelling Valuation' As Enterprise IT Spend Rises

Fortified by not only stronger enterprise IT spending but also other critical factors, Oracle represents a "compelling valuation" and should hit the upper half of its guidance range, UBS analyst Brent Thill states in a research note."We believe ORCL can still hit upper-half of guid. range thanks to strong FQ4 seasonality, improving enterprise IT spend (espec. in U.S.), and mgmt's conservative guidance & close rates," Thill writes. "We prudently cut" estimates for fiscal 2011 due to anticipated adverse affects of foreign-exchange rates, "though positive drivers remain, incl. enterprise IT recovery, rebuilding of Sun, and Fusion Apps launch."

Thill said those factors have led him to maintain his "buy" rating for Oracle stock.

As for Sun, Larry Ellison has said it would be profitable from the first month it became a formal part of Oracle and is expected to contribute $1.5 billion to Oracle's bottom line in its first full year as part of Ellison's company.

The company is equally bullish on the prospects for its forthcoming suite of Fusion applications, which Ellison has said will be rolled out in the second half of this year.