Update shared on27 Aug 2025
Fair value Increased 1.34%Analysts raised SAP’s price target slightly to €290.95, citing robust Q2 results and confidence in its cloud transition, though concerns persist over macroeconomic risks and valuation.
Analyst Commentary
- Bullish analysts highlight robust Q2 results with 12% revenue growth and a 34% increase in operating profit as key drivers for raising price targets.
- Some are concerned about the impact of macroeconomic uncertainty, including trade tensions and potential deal delays, particularly in U.S. federal and manufacturing sectors affected by tariffs.
- There is continued confidence in SAP’s transition to the cloud and its positioning as a durable growth story with long-term capital appreciation potential, despite declines in support streams.
- Guidance is viewed as conservative or prudent, with some analysts suggesting management's cautious messaging may understate achievable performance.
- Bearish analysts cite SAP’s current high valuation, limiting further upside potential, and note profit-taking activity following recent free cash flow commentary.
What's in the News
- SAP completed a €4.6 billion share buyback, repurchasing 2.12% of shares as of June 30, 2025.
- AGM approved a dividend increase to €2.35 per share for fiscal year 2024, totaling €2,743 million in distributed dividends.
- SAP reaffirmed 2025 guidance: expects cloud revenue growth of 26–28% and cloud/software revenue up 11–13% at constant currency, with negative currency impacts expected; non-IFRS operating profit seen up 26–30%.
- SAP launched new strategic partnerships, including with JA Worldwide for global youth career readiness, CData for expanded Business Data Cloud integration, and Vistex for broader margin optimization on SAP S/4HANA Cloud.
- Multiple product and client announcements highlight enhanced SAP Concur capabilities (via Ryan), new e-mobility management solutions with BearingPoint, and an SAP-endorsed talent experience app from Phenom, underscoring SAP’s strengthening ecosystem and cloud offering.
Valuation Changes
Summary of Valuation Changes for SAP
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from €287.12 to €290.95.
- The Consensus Revenue Growth forecasts for SAP remained effectively unchanged, moving only marginally from 12.2% per annum to 12.3% per annum.
- The Future P/E for SAP remained effectively unchanged, moving only marginally from 38.92x to 39.42x.
Disclaimer
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