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Investing.com - Deutsche Bank lowered its price target on SAP (SAP:GR) (NYSE:SAP) to €270 from €300 on Monday while maintaining a Buy rating on the enterprise software company.
The German bank reduced its fiscal year 2025 and 2026 earnings per share estimates by approximately 1% to 1.5%, citing a recent derating across software peers as the primary reason for the target adjustment.
Deutsche Bank noted that SAP currently trades at 33 times its fiscal year 2026 price-to-earnings ratio, which is in line with peers when stock-based compensation is treated as a cost for both SAP and its peer group.
The bank emphasized that SAP continues to gain market share while delivering above-peer earnings and free cash flow growth, making the current valuation "highly compelling" despite the reduced price target.
While Deutsche Bank expects "a somewhat softer Q3" for SAP, it believes the recent pullback in the stock presents "a great entry point into a strong multi-year growth expansion and share gain story in Enterprise Software."
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