SAP Trades Near Yearly Low Ahead of Pivotal Q2 Report; Bullish Calls Coexist with Rising Costs and EU Probe
20.06.2026 - 15:16:00 | boerse-global.de
The gap between SAP’s stock price and analyst price targets has rarely been so wide for a DAX heavyweight. Shares changed hands at €134.00 on Monday, barely above the 52-week low of around €133.60 recorded on June 19. That leaves the stock down roughly a third since the start of 2026 — or 46 percent on a 12-month basis — even as several Street analysts argue the sell-off is overdone.
Bernstein reaffirmed its buy rating and €276 price target on June 17, implying more than 100 percent upside from current levels. Bank of America followed suit on June 11 with a comparable buy call, while JPMorgan stuck with a hold that day. Goldman Sachs, though trimming its second-half gross margin forecast from 73.3 percent to 72.8 percent on higher hardware costs, maintained its own buy recommendation. The sharp divergence between market sentiment and analyst conviction is unusual for a company of SAP’s scale.
Underlying Strength vs. Sector Headwinds
First-quarter results, released in April, showed no signs of a slowdown. Cloud revenue climbed 27 percent year-on-year, total sales reached €9.6 billion, and operating profit hit €2.9 billion. The cloud order backlog — a key forward-looking metric — rose 20 percent to €21.9 billion. That strength, however, has been drowned out by sector-wide noise.
Oracle’s announcement of investment spending between $90 billion and $95 billion for fiscal 2027, far above earlier expectations, was read as a warning that cost pressures are rising across the enterprise-software space. SAP reacted by becoming the weakest stock in the DAX that day, shedding 4.1 percent after Goldman’s margin cut. Meanwhile, the interest-rate backdrop has turned more hostile: Goldman Sachs has removed any rate cuts from its 2026 forecast, pushing the first easing to 2027 at the earliest. For high-valuation growth stocks, higher discount rates weigh heavily on present value.
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EU Proceedings Moving Toward a Settlement
Behind the scenes, the European Commission’s cartel case against SAP is showing signs of resolution. The probe examines whether SAP restricted competition in the aftermarket for ERP maintenance and support. A conviction could theoretically result in a fine of up to 10 percent of annual revenue, but the commission has launched a market test of commitments offered by the company. Those pledges include giving customers more freedom in choosing maintenance providers and greater licensing flexibility. If no significant objections emerge, the case is expected to be closed without a penalty. SAP has said it anticipates no material financial impact.
Buyback, Bonds, and Acquisitions
SAP is running a share buyback of up to €2.6 billion that runs through the end of July, part of a larger €10 billion program announced in January 2026 and valid until end-2027. The repurchase provides a predictable floor of demand, though it has so far failed to arrest the downtrend. The relative strength index sits at 33.6, close to oversold territory, while the stock trades roughly 28 percent below its 200-day moving average.
The company also raised €3.5 billion through a four-tranche euro-denominated bond in late May. Proceeds are earmarked to refinance recent acquisitions, including the May closing of master-data-management firm Reltio. A planned takeover of Dremio is expected to bolster SAP’s Business Data Cloud offering.
Q2 Test on July 23
All eyes now turn to the half-year report due on July 23. Investors will scrutinise two critical numbers: the cloud order backlog and the cloud gross margin. The first-quarter backlog benefited from non-recurring factors that are not expected to repeat in Q2, dampening expectations. Goldman Sachs has flagged that a customer in the Middle East intends to scale back activity, which could also weigh on cloud growth.
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Encouraging pipeline signals from SAP’s Sapphire conference provide some counterbalance, but the real test is whether those leads convert into signed contracts. Full-year analyst consensus stands at earnings per share of €7.22. Management has maintained its outlook but conditioned it on an easing of tensions in the Middle East and the successful integration of Reltio.
Until July 23, the buyback programme remains the only steady source of buying support. Whether SAP’s artificial-intelligence strategy will start to show up in hard order figures — and whether the market will finally look past the macro noise — will be decided in six weeks.
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