Jefferies trims SAP target price to EUR 250 from EUR 270

Jefferies has revised its price target for SAP (SAP) downward to EUR 250 from EUR 270, while maintaining a "Buy" rating on the stock. The adjustment reflects the firm's ongoing assessment of SAP's performance and market positioning. Jefferies notes that SAP has a "low hurdle to sustain momentum" in Q1, supported by order wins and ongoing restructuring efforts in fiscal 2024. The firm acknowledges that while SAP cannot be entirely insulated from a prolonged economic downturn, it remains a "relative safe haven" during the Q1 reporting period.

SAP's recent financial performance has shown strength, particularly in its cloud segment. In Q1 2024, the company reported a 25% increase in cloud revenue to €3.9 billion and a 28% rise in current cloud backlog to €14.2 billion. These figures underscore SAP's progress in its cloud transition and its ability to generate consistent growth. Jefferies' updated price target aligns with broader analyst sentiment, which remains largely positive, with a consensus "Buy" rating from four analysts. The firm's decision highlights confidence in SAP's strategic direction and its capacity to navigate macroeconomic challenges through innovation and disciplined execution.