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Investing.com - Piper Sandler has reduced its price target on SAP SE (NYSE:SAP) to €345 from €355 while maintaining an Overweight rating on the stock. According to InvestingPro data, SAP currently trades near its 52-week high of $313.28, with a market capitalization of $355 billion.
The research firm cited prolonged sales cycles in U.S. public sector and manufacturing due to trade uncertainty as a key factor increasing execution risks for the second half of the year.
Despite these challenges, SAP’s cloud ERP business remains a growth highlight, delivering strong constant currency year-over-year growth of 34%, slightly higher than the 33% reported in the previous quarter.
Piper Sandler has lowered its 2025 revenue estimates for SAP, factoring in a lower pipeline conversion rate compared to last year, though it noted management’s commitment to containing costs to achieve the €8 billion free cash flow target.
The firm continues to view SAP as "one of the best positioned large-cap application software growth names to own," while expressing a preference for Microsoft (NASDAQ:MSFT), Oracle (NYSE:ORCL), and SAP over Workday (NASDAQ:WDAY) in the sector.
In other recent news, SAP has been the focus of several analyst updates and strategic discussions. Piper Sandler has raised its price target for SAP to EUR355, maintaining an Overweight rating, due to increased demand in enterprise resource planning (ERP). The firm noted that 68% of respondents plan to boost their SAP spending in 2025, up from 50% previously. Additionally, UBS has lifted its price target for SAP to EUR307 following the company’s SAPPHIRE event, emphasizing SAP’s resilience in demand and its focus on AI and data cloud initiatives.
Piper Sandler also initiated coverage on SAP with an Overweight rating and a EUR350 price target, highlighting the company’s rapid growth in the cloud segment, particularly its Cloud ERP business, which has achieved a EUR17 billion run-rate with 34% year-over-year growth. Meanwhile, SAP CEO Christian Klein expressed skepticism about the need for more data centers in Europe to support artificial intelligence, countering recent comments by Nvidia (NASDAQ:NVDA) CEO Jensen Huang.
These developments reflect SAP’s strategic positioning and market perception as it navigates evolving technological demands and economic conditions.
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