SAP AG (sap) PT Raised to $280 at CFRA

CFRA analyst Angelo Zino raised the price target on SAP AG (NYSE: sap) to $280.00 (from $259.00) while maintaining a Hold rating.

The analyst comments "We raise our 12-month target to USD280 from USD259 on a P/E of 37.1x our 2026 EPS view, well above historical forward averages to reflect our view of improving growth prospects tied to AI and the cloud. We keep our 2025 EPS at EUR6.15 and raise 2026's to EUR7.22 from EUR7.18. SAP posted Q4 EPS of EUR1.40 vs. EUR1.41, missing the EUR1.45 consensus. Sales rose 11%, better than expected, as 27% cloud growth was partly offset by a 3% decline in software licenses and support. Gross margin expanded to 74.3% from 73.4%, wider than expected, on better cloud margins (73.5% vs. 72.2%). Cloud backlog grew 32% (+29% in CC), with nearly half of orders including AI use cases, while total cloud backlog rose 43% to EUR63.3B (+40% in CC; ~3.7x 2024's cloud revenue), providing visibility as we expect cloud growth to help accelerate total revenue growth through 2027. We note cloud ERP sales rose a healthy 35% (+33% in CC) and 83% recurring revenue share, as we think cloud revenue is poised to increase another 26%-28% in 2025."

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