UPDATE 1-RESEARCH ALERT-Oracle remains Morgan Stanley's top pick

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Dec 27 (Reuters) - Morgan Stanley said Oracle Corp (ORCL.O: Quote, Profile, Research, Stock Buzz) remains its "top pick" for 2008 and that the software maker is beginning to win back some wallet share in the enterprise resource planning market.

Oracle is an attractive investment as the stock currently trades at a 30 percent discount to the overall software group and at a 10 percent discount to its 5-year average, the investment bank said in a note to clients.

With the potential of weaker economic trends in the United States, Oracle's geographically diversified revenue base and large contribution from high-margin recurring maintenance revenue make it one of the best defensive names in its coverage universe, Morgan Stanley added.

The investment bank has an "overweight" rating and a $26 price target on the world's No. 2 publicly held software maker. (Reporting by Aditi Samajpati in Bangalore; Editing by Deepak Kannan)