SAP: sales below forecasts - Oddo cuts TP

(CercleFinance.com) - With Germany's corporate software publisher SAP announcing mixed quarterly results and sales (6.
54 billion euros) that are 5% below expectations, Oddo believes that the company also has a dimmer outlook for 2021 and 2022, resulting in lower forecasts.

Indeed, SAP announces that its growth will be limited in 2021 and 2022 and that its margins will not increase over the same period. By 2023 the impact on margins is estimated at 4 to 5 points, Oddo says. It is therefore cutting its 2020-22 OP estimates by -3%, -12% and -16% respectively.

In this context, while Oddo maintains its buy rating on the share, it has significantly cut its target price from 162 euros to 138 euros - although this still leaves it with 38% upside potential.

The share is up over 2.5% in late morning trading in Frankfurt on Tuesday.


Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.