On Tuesday, Berenberg maintained a Buy rating on shares of SAP SE (ETR:SAPG) (SAP:GR) (NYSE: SAP) while increasing the price target to EUR220.00, up from the previous EUR195.00. The firm's decision follows SAP's announcement of its cloud backlog growth for Q2 2024, which was reported overnight.
According to Berenberg, this growth indicates that SAP is experiencing robust and healthy cloud migration growth, setting it apart from some of its peers who have reported a softening in demand.
SAP's performance, particularly in its cloud backlog growth rates, stands out within the large-cap enterprise software sector for 2024, as it is the only company to show such resilience. Berenberg anticipates that SAP's cloud migration momentum is likely to accelerate, which could make SAP one of the most resilient software names in the latter half of the year.
The upgrade in the stock price target to EUR220.00 reflects a positive outlook on SAP's efficiency due to a wider restructuring program announced in Q2 2024. Additionally, there is better visibility into the company's top-line targets, supported by the continued robust growth in its cloud backlog.
Berenberg's stance is clear as they encourage investors to continue buying SAP shares, expecting the company to sustain its strong performance in the upcoming months.
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