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On Friday, JPMorgan reaffirmed its confidence in SAP SE (ETR:SAPG) (SAP:GR) (NYSE: SAP), maintaining an Overweight rating and a price target of EUR290.00. The software giant, currently valued at $354 billion, is trading near its 52-week high of $303.39, according to InvestingPro data. While the stock has delivered impressive returns with a 54.7% gain over the past year, current valuations suggest the stock is trading above its Fair Value. The endorsement follows SAP’s Sapphire conference in Orlando, where the company unveiled a strategic pivot towards suite-as-a-service applications, its Business Data Cloud, and artificial intelligence initiatives, including Joule & AI Agents.
The analyst from JPMorgan, Toby Ogg, highlighted the strong early demand for SAP’s Business Data Cloud, echoing the bullish sentiments expressed by SAP CEO Christian Klein. Additionally, discussions with a key SAP partner revealed enthusiasm for the company’s integration with Databricks, which is seen as a strategic and well-received move by customers. This strategic positioning has helped SAP maintain strong financial performance, with InvestingPro data showing revenue growth of 10.5% and an impressive gross profit margin of 73.6%.
According to Ogg, these recent developments bolster the investment narrative for SAP, as the growth potential from these emerging initiatives is not yet fully recognized in the consensus views. This offers potential for upside to the company’s growth forecasts over time.
SAP’s CFO, Dominik Asam, acknowledged some challenges that may affect cash conversion in 2026 but made positive remarks regarding the sustainability of SAP’s growth, implying the potential for double-digit percentage revenue increases. Ogg interprets these comments as a clear signal of robust revenue growth prospects that could extend beyond 2027.
In reiterating the Overweight rating, JPMorgan underscores its outlook for SAP’s revenue growth trajectory through 2027 and beyond, suggesting a compelling mid-term investment thesis for the company’s stock. InvestingPro analysis reveals the company has maintained dividend payments for 34 consecutive years and operates with a moderate level of debt. For deeper insights into SAP’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers, along with 12 additional ProTips and extensive financial metrics.
In other recent news, SAP AG (NYSE:SAP) has been the focus of several analyst reports and company announcements. Wells Fargo (NYSE:WFC) initiated coverage on SAP with an Overweight rating and set a price target of EUR345, citing the company’s cloud conversion momentum as a key growth driver. This is expected to contribute significantly to SAP’s revenue from 2025 to 2027. TD Cowen also raised its price target for SAP to $350, maintaining a Buy rating, following positive insights from the company’s Sapphire ’25 conference. Analysts at Cowen highlighted SAP’s commitment to cloud migration and AI initiatives as factors likely to drive long-term growth.
KeyBanc Capital Markets maintained an Overweight rating with a price target of €290, noting SAP’s strategic partnerships, such as the collaboration with Databricks, as significant developments. These partnerships are anticipated to enhance SAP’s cloud offerings and leverage its substantial support base. Additionally, SAP announced advancements in Business AI at its annual Sapphire conference, aiming to increase business productivity by up to 30%. The introduction of AI-powered solutions, including the expansion of its AI assistant Joule and collaborations with companies like Perplexity and Palantir (NASDAQ:PLTR), underscores SAP’s focus on modernizing business processes and supporting cloud migration efforts.
These developments reflect SAP’s strategic direction in enhancing its cloud and AI capabilities, which are expected to play a crucial role in the company’s growth trajectory.
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