SAP's Cloud Backlog Beats Consensus as Barclays and Deutsche Bank Lift Targets, JPMorgan Stays on the Fence
Published on 10/23/2026 at 06:31 | Editorial boerse-global.de
SAP's third-quarter report has triggered a split verdict on the sell side, with two brokers raising their price targets and a third holding its ground despite acknowledging the same operational strength. Barclays lifted its target to €250 from €210 while reaffirming its "Overweight" rating, and Deutsche Bank Research moved to €235 from €200, keeping its buy recommendation intact. JPMorgan, by contrast, left SAP at "Neutral" with a €175 target.
The shares rose 3.4% yesterday, catching the positive news flow that followed Wednesday's results and the subsequent analyst revisions. Pinpointing that single-day gain to one specific headline is not possible from the outside.
Backlog clears the bar
What separated the quarter from a merely solid print was the cloud order book. Current Cloud Backlog reached €24.1 billion, up 28% year on year — and 26% at constant currencies, a distinction that matters because it shows the growth held up even after stripping out FX effects. Reuters reported that SAP beat expectations on this measure, a point both Deutsche Bank analyst Johannes Schaller and JPMorgan's Toby Ogg singled out.
Cloud revenue for the third quarter of 2026 came in at €6,668 million, a gain of 26%. Group revenue advanced 13%, while the operating result climbed 18% — stronger than the top line, whether measured on an IFRS or a non-IFRS basis. Growth was therefore not confined to a single metric: cloud outpaced the group, and profit outpaced revenue.
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Why the targets moved
Deutsche Bank's upgrade rests on more than the reported figures. The house pointed to the growing commercial significance of SAP's "Autonomous Enterprise" offering, a product whose business prospects now carry weight in how the quarter is being valued. Barclays set its bar higher still, and both firms kept their positive ratings while raising their targets in the wake of the results.
JPMorgan's stance illustrates that strong numbers do not automatically translate into a buy call. Ogg highlighted the cloud backlog's move above consensus, yet his cautious rating stands. For investors, the operative question is less about yesterday's share price move than about what underpins the more favorable valuations — and on that, the brokers disagree.
Customers want to know where the AI comes from
Running alongside the growth story is a demand from the client base that has little to do with raw performance. Finance chief Dominik Asam told Reuters yesterday that customers are increasingly asking where the AI models embedded in SAP's enterprise software originate and which governance rules apply to them. SAP integrates more than 70 models from a range of providers, according to Asam.
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His remarks describe customer questions, not a reported hit to the business. No order decline and no change to guidance can be inferred from them. Still, they add a concrete requirement to the growth debate: the way AI is wired into SAP's products has to be explainable to clients on more than technical grounds, covering provenance and control mechanisms as well.
Taken together, the quarter offers operational tailwind — a cloud backlog ahead of expectations, revenue and profit both climbing — while the assessment of that performance varies from broker to broker. Asam's comments round out the picture with a question investors will be watching: how SAP meets its customers' rising expectations for how AI is sourced and governed.
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