SAP's €134 Puzzle: Analysts Eye 100% Upside While the Market Sells First
20.06.2026 - 09:31:35 | boerse-global.de
SAP shares have slumped to €134, within striking distance of a 52-week low, even as a chorus of analysts from Berenberg to Bernstein peg the stock as a screaming buy. Bernstein's €276 price target implies more than a double from current levels, while Berenberg sees a path back to €215. Yet the market is in no mood to listen — the software giant has shed a third of its value since January and sits 46% lower than a year ago.
The disconnect stems from a tug-of-war between robust operational performance and a wall of macro and sector-specific worries. SAP's first-quarter results were solid: cloud revenue rose 27% year-on-year, total turnover hit €9.6 billion, and operating income reached €2.9 billion. The cloud order backlog — a key forward indicator — swelled to €21.9 billion, up 25% on a currency-adjusted basis. Management is guiding for free cash flow of around €10 billion for the full year. None of that, however, has been enough to lure buyers.
Instead, investors are fixated on external shocks. Oracle's announcement that it plans capital expenditures of $90 billion to $95 billion for fiscal 2027 — far above consensus — was read as a cost warning for the entire enterprise-software sector. SAP was the worst performer in the DAX that day. Goldman Sachs compounded the anxiety by trimming its second-half 2026 gross margin forecast for SAP from 73.3% to 72.8%, citing higher hardware costs. The bank also removed any expectation of rate cuts in 2026, pushing the first possible easing to 2027 — a headwind for richly valued growth stocks.
Should investors sell immediately? Or is it worth buying SAP?
Meanwhile, SAP is going on the offensive. The group is investing more than €1 billion over four years in Prior Labs, a Freiburg-based AI startup focused on structured data. It is also pursuing the acquisition of data provider Dremio, a deal under review by Germany's Federal Cartel Office since mid-May. Both transactions are expected to close in the third quarter of 2026. To fund the shopping spree, the company placed a €3.5 billion Eurobond in four tranches at the end of May. A separate €10 billion share buyback programme is also underway: the first tranche, which ended in April, saw SAP repurchase roughly 16 million shares at an average price of €161.16, spending nearly €2.6 billion.
Not all acquisition news went unnoticed: SAP recently closed the purchase of Reltio, a master-data-management platform. But a cloudier signal comes from a Middle Eastern customer that is scaling back its activities — Goldman Sachs warns this could weigh on second-quarter cloud growth. Counterbalancing that, positive pipeline signs from the Sapphire conference offer some hope, though the real test arrives with Q2 earnings on 23 July.
Two metrics will dominate that day: the cloud backlog and the cloud gross margin. The latter will show whether the massive AI investments are already converting into paid subscriptions. With the stock trading near its lows and a dozen analysts disagreeing on valuation by nearly €100, the July numbers could finally tip the scales — one way or the other.
Ad
SAP Stock: New Analysis - 20 June
Fresh SAP information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
