BofA Securities lowers SAP stock price target to EUR316 on FX impact

Investing.com - BofA Securities has lowered its price target on SAP (SAP:GR) (NYSE:SAP) to EUR316.00 from EUR320.00 while maintaining a Buy rating, citing foreign exchange impacts on the company’s forecasts. Currently trading at $266.91, SAP commands a market capitalization of $307.87 billion and maintains an impressive 34-year streak of consecutive dividend payments, according to InvestingPro data.

The firm reduced its forecasts due to FX headwinds, which it expects will impact 2025 revenue by approximately 50 basis points and 2026 revenue by 100 basis points. For SAP’s American Depositary Receipts, the price target was adjusted to $371 from $376. The company has demonstrated strong financial performance with a 10.28% revenue growth and an impressive 73.8% gross profit margin in the last twelve months.

Despite the price target reduction, BofA Securities reiterated SAP as its large cap top pick and noted the stock is included in its "25 stocks for 2025" and Europe 1 list of top ideas. The firm acknowledged that SAP shares have underperformed the SX8P by 5 percentage points since second-quarter earnings in July. For deeper insights into SAP’s valuation and growth metrics, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 top stocks.

BofA Securities views SAP’s growth as structural, supported by both software upgrade and infrastructure migration cycles. The firm also considers SAP an artificial intelligence beneficiary due to its critical data ownership, with monetization potential through a broad AI product set including SAP Joule and Analytics agents.

The research firm expects AI to support operating leverage for SAP, with approximately 0.5 billion in AI efficiencies targeted and up to 30% efficiency gains in research and development, while maintaining that SAP offers "highly predictable growth" at 20 times 2026 estimated EBITDA.

In other recent news, SAP SE announced its acquisition of talent acquisition software provider SmartRecruiters. This move is designed to enhance SAP’s SuccessFactors human capital management suite by integrating SmartRecruiters’ recruiting capabilities, such as high-volume recruiting automation and AI-enabled candidate engagement tools. The transaction, which is expected to close in the fourth quarter of 2025, is still subject to regulatory approvals, with financial terms undisclosed. However, SmartRecruiters was last valued at $1.5 billion in its Series E funding round in 2021 and reported $71 million in sales last year, demonstrating strong revenue growth.

Additionally, Barclays has raised its price target for SAP to $322, maintaining an Overweight rating, citing solid revenue performance. The firm noted that SAP’s cloud revenue has accelerated toward the upper end of the company’s fiscal year guidance range. Berenberg also reiterated its Buy rating on SAP stock, setting a price target of EUR289.00 after the company released its Q2 2025 results. Despite a foreign exchange-driven revenue miss, Berenberg described the quarterly results as solid, reflecting the impact of USD/EUR currency movements. These developments highlight SAP’s ongoing efforts to strengthen its market position and enhance its product offerings.

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