SAP SE (ETR:SAPG) (SAP) was lifted to Buy from Hold at Jefferies on Friday, with analysts raising the firm's price target for the stock to €190 from €135 per share.
Analysts told investors that the company's 4Q23 numbers were complex but went some way to answering two residual questions.
"First, beating 4Q23 cloud backlog (CCB) growth expectations answers questions on the sustainability of sequential CCB growth into FY24," analysts wrote.
"Meanwhile, upgrades to FY25 guidance and lower SBC improve the valuation," they added. "Against elevated expectations, FY24 guidance was arguably shy of cons and would likely have been met with mild disappointment. However, the news in the statement was a €2bn restructuring programme to fund investments into AI. SAP needs to be part of the AI debate and strategically this looks to be a sensible decision."
Analysts noted that SAP's CCB growth underpinned the company's forward momentum, while they believe there is "no reason to question growth."