Berenberg reiterates Buy rating on SAP stock amid solid Q2 results

Investing.com - Berenberg has reiterated its Buy rating on SAP (ETR:SAP) (NYSE:SAP) stock with a price target of EUR289.00 following the company’s Q2 2025 results released on July 22. This aligns with the broader analyst consensus, as InvestingPro data shows SAP maintains a strong Buy recommendation with a potential 17% upside to analyst targets. The company’s overall financial health score is rated as GOOD, supported by strong profitability metrics.

The German software giant reported what Berenberg characterized as "solid" quarterly results despite a foreign exchange-driven revenue miss that prompted a guidance revision, reflecting year-over-year USD/EUR currency movements during the quarter. Despite these challenges, SAP has maintained impressive revenue growth of 10.5% over the last twelve months, with a robust gross profit margin of 73.6%.

SAP experienced a deceleration in current cloud backlog growth, which Berenberg attributed to the package of U.S. tariffs implemented in April. The research firm noted that the limited impact from tariff-driven macroeconomic uncertainties demonstrates the resilience of SAP’s business model.

Berenberg highlighted SAP’s continued cost discipline as particularly impressive in the current environment. The company’s year-to-date profitability performance supports Berenberg’s optimistic near-term margin outlook for the enterprise software provider.

The maintained Buy rating suggests Berenberg remains confident in SAP’s fundamental business strength despite the currency headwinds and tariff-related challenges that affected the quarter’s results. InvestingPro subscribers can access 12 additional key insights about SAP, including detailed analysis of its valuation metrics and growth potential. Get the complete picture with InvestingPro’s comprehensive research report, available for SAP and 1,400+ other top stocks.

In other recent news, SAP has reported significant developments in its financial performance and market evaluations. The company posted mixed results for the second quarter of 2025, with non-IFRS earnings per share of €1.50, surpassing the consensus estimate of €1.45, and an operating profit of €2.57 billion, exceeding the anticipated €2.42 billion. Bernstein SocGen Group increased its price target for SAP to $344.00 from $324.00, citing notable margin improvements that exceeded expectations. Meanwhile, JMP Securities also raised its price target to $375.00 from $330.00, highlighting the growth in cloud revenue. KeyBanc reiterated its Overweight rating on SAP, maintaining a price target of EUR290.00 and noting the steady progress of SAP’s cloud transition. Oppenheimer maintained its Perform rating, acknowledging SAP’s solid quarterly results and strong growth in transitioning its ERP installed base to the Cloud Suite. Additionally, SAP CEO Christian Klein mentioned that uncertainty from President Trump’s tariffs has caused some clients to hesitate in signing up for services, although SAP remains relatively insulated from direct tariff impacts.

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