11:29 AM EDT, 09/10/2024 (MT Newswires) -- Oracle (ORCL) posted a rebound in bookings growth, strategic applications and cloud infrastructure revenue in fiscal Q1 as "trendlines inflect positively after the Q4 downturn," Morgan Stanley said Tuesday in a report.

Still, gross margins faced pressure and a lag in billings growth indicate risk for the outlook for earnings per share, Morgan Stanley said.

Revenue growth in Q1 was driven by strong license and cloud services figures, the report said.

"The company was able to translate this into earnings per share outperformance as overall gross margins were only down 10 bps in the quarter, while operating expenses continue to decline," Morgan Stanley said.

The firm said concerns linger regarding the durability of growth as an accounting change temporarily supports gross margins, along with reliance on license revenue and subdued capital expenditures.

Morgan Stanley raised its price target on Oracle's stock to $145 from $125 and kept its equalweight rating. At least 20 other analysts boosted their price targets.

On Monday, Oracle reported Q1 adjusted earnings and revenue that topped estimates by analyts. Remaining performance obligations, or future commitments arising from contractual relationships, surged 53% to a record $99 billion, which will bolster revenue growth throughout fiscal 2025, Chief Executive Officer Safra Catz said.

Shares of the company jumped 12% in recent trading Tuesday.

Price: 156.48, Change: +16.59, Percent Change: +11.86