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BofA analysts, who have a Buy rating and €136 (€1 = $1.0832) price target on the stock, told investors in a note that the company was confident about its top line.
“Overall, the Cloud revenue and total revenue targets have been meaningfully increased vs the initial plan, with the Cloud revenue 6% ahead of the previous guidance, net of Qualtrics, while the total revenue guidance is 10% ahead of the previous plan,” wrote Boulan. “SAP is also planning to see accelerating revenue growth through 2027. Margins were an area of concern with an adverse private cloud mix – overall the new Cloud gross profit target of €16.3bn is only in line with consensus, implying a lower cloud margin of 76% vs consensus at 77% (and initial 80% SAP guidance).”
Oppenheimer maintained a Perform rating on SAP shares.
Analysts there explained that the company “provided an upbeat strategy and financials presentation, consistent messaging around process automation, and AI-focused innovation path.”
“We found the information at the analyst day more incremental than material, but remain encouraged by SAP’s strategy, generative AI roadmap, and evolution of the product portfolio. While BTP and RISE’s early success highlights a favorable monetization opportunity in cloud ERP, a lingering business model transition and a legacy suite of technologies remains overhangs for new investors,” they said.
