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Piper Sandler initiated coverage on SAP (SAP:GR) (NYSE:SAP) with an overweight rating and set a price target of €350.00 on Tuesday.
The research firm highlighted SAP’s emergence as one of the fastest-growing cloud segments in the software industry, with its Cloud ERP business reaching a €17 billion run-rate with 34% year-over-year growth.
Cloud services are poised to exceed 50% of SAP’s total revenue mix for the first time this year, according to Piper Sandler’s analysis.
The firm expects this cloud mix shift to position SAP to maintain double-digit revenue growth alongside improving margins, potentially compounding free cash flow at 15-20% annually through 2030 and beyond.
Piper Sandler based its overweight rating on SAP’s Cloud ERP model shift, which it believes could drive both earnings and multiple expansion for the German software giant.
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