KeyBanc believes Oracle can outperform in a tougher economic environment as the prospects for a downturn are rising.

On Friday, analyst Michael Turits raised his rating on Oracle (ticker: ORCL) stock to Overweight from Sector Weight, citing the software company's future growth potential. He also established a $80 price target.

Oracle is a "defensive play in a more difficult macro environment," he wrote. "We also see opportunity for significant margin improvements from Cerner's current 21% margins."

In June, Oracle completed its acquisition of electronic healthcare records company Cerner, which it had purchased for roughly $28 billion.

Oracle stock rallied 4% to $72.04 in Friday trading.

The analyst noted Oracle's core database business should be more resilient from spending cuts, according to KeyBanc's recent survey of chief information officers. He also cited the company's new financial targets to grow revenue to $65 billion and achieve a 45% operating profit margin including Cerner by fiscal 2026.

"We see opportunity for continued strong growth [for Oracle] based on a differentiated strategy," Turits wrote.

Last week, Oracle CEO Safra CatzSafra Catz told Barron's the software company could grow at a double-digit rate going forward without including acquisitions.

Oracle stock has dropped 18% so far this year, compared to the tech-laden Nasdaq Composite index's 32% decline.