SAP stock price target raised to $344 from $324 at Bernstein on margin growth

Investing.com - Bernstein SocGen Group raised its price target on SAP AG (NYSE:SAP) to $344.00 from $324.00 on Wednesday, while maintaining an Outperform rating on the enterprise software giant. The new target aligns with broader analyst sentiment, as InvestingPro data shows 4 analysts recently revised their earnings estimates upward, with price targets ranging from $286 to $375.

The research firm cited SAP’s solid quarterly results, particularly highlighting margin improvements that exceeded expectations. According to Bernstein, SAP increased margins by "hundreds of basis points," a trend the firm expects to continue. InvestingPro data reveals an impressive gross profit margin of 73.63%, supporting this positive trajectory. The company’s overall financial health score is rated as GOOD, with particularly strong profitability metrics.

Despite delivering strong top-line performance, SAP faced greater-than-anticipated foreign exchange impacts. Bernstein noted that macroeconomic concerns persist, with SAP management mentioning some deals were delayed due to requiring additional approvals.

The research firm emphasized that SAP’s position as a provider of "critical solutions for some of the largest/most complex companies in the world" helps limit downside risks for the stock. Despite the challenging macro environment, SAP maintained its constant currency guidance.

Bernstein’s new $344 price target represents an increase from the previous $324 target, with analysts maintaining SAP’s multiple while rolling forward their estimates.

In other recent news, SAP reported mixed second-quarter 2025 results, with non-IFRS earnings per share of €1.50, surpassing the consensus estimate of €1.45, and operating profit of €2.57 billion, which was above the consensus of €2.42 billion. Oppenheimer reiterated its Perform rating on SAP, noting the company’s solid results that met market expectations. The firm highlighted SAP’s strong growth in transitioning its ERP installed base to its Cloud Suite. Meanwhile, JMP Securities raised its price target for SAP to $375, citing growth in cloud revenue, while maintaining a Market Outperform rating. Piper Sandler, on the other hand, adjusted its price target to €345 from €355, pointing to trade uncertainty affecting U.S. public sector and manufacturing sales cycles. Despite this, Piper Sandler previously raised its target to €355, based on strong demand for SAP’s ERP solutions, with a significant portion of respondents planning to increase their SAP spending in 2025. SAP’s CEO noted that Trump’s tariffs are causing some clients to delay signing up for services due to economic uncertainty. Nonetheless, SAP remains relatively shielded from direct tariff impacts due to its focus on cloud and software services.

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