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On Thursday, KeyBanc Capital Markets sustained its Overweight rating and €290.00 price target for SAP SE (ETR:SAPG) (SAP:GR) (NYSE: SAP), following insights gathered at the "Sapphire 2025" event. The software giant, currently valued at $346.84B, has demonstrated strong momentum with a 54.86% return over the past year. KeyBanc’s analysis suggests a mixed sentiment among SAP’s customer base, which is largely influenced by global industrial and manufacturing trends and may be assessing the current economic climate with caution due to potential tariff impacts. According to InvestingPro data, SAP is currently trading above its Fair Value, though analysts maintain a bullish consensus with a 1.69 rating.
Despite the cautious stance of some customers, SAP’s management exhibited a quiet confidence in the company’s transformation strategy, which extends beyond basic cloud migration. Christian Klein, SAP’s CEO, displayed optimism during the Q&A session, hinting at the company’s progress with new products, cross-selling, upselling, and acquiring new customers through an enhanced channel presence.
The partnership between SAP and Databricks, which focuses on the Business Data Cloud, was highlighted as a significant development, demonstrating SAP’s evolution from its previous business model. KeyBanc pointed out that such a collaboration with a leading cloud-based data platform provider represents a notable shift for SAP and suggests a greater opportunity for the company’s €11 billion support base.
KeyBanc’s commentary underscores the potential that SAP’s current initiatives could bring, particularly in leveraging its substantial support base to generate more value as the company continues to expand its cloud offerings and partnerships. The firm’s maintained Overweight rating and price target reflect this positive outlook on SAP’s strategic direction and market position.
In other recent news, SAP SE has made significant strides in its business operations and financial outlook. The company recently unveiled advancements in Business AI during its annual SAP Sapphire conference, introducing innovations like the expansion of its AI assistant Joule and partnerships with Perplexity and Palantir (NASDAQ:PLTR). These moves aim to enhance business productivity and support cloud migration efforts. In its first-quarter financial report filed with Deutsche Boerse (ETR:DB1Gn) AG, SAP provided insights into its performance, including non-IFRS measures, while maintaining transparency about its financial health.
Wells Fargo (NYSE:WFC) has initiated coverage on SAP with an Overweight rating and a price target of EUR345, citing the company’s cloud conversion momentum as a key growth driver. The firm expects SAP’s cloud migration to significantly boost revenue from 2025 to 2027. Additionally, TD Cowen raised its price target for SAP to $320, maintaining a Buy rating despite a slight miss in SAP’s first-quarter results. The analyst emphasized confidence in SAP’s business outlook, noting strong pipelines and stable deal closing rates.
SAP’s strategic focus on cloud migration is further supported by a cultural transformation aligning with this transition, as noted by Wells Fargo. The company’s efforts to defend its market share and enhance its cloud platform are expected to resonate well amid market uncertainties. These developments reflect SAP’s ongoing commitment to innovation and strategic growth in a competitive technology landscape.
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