SAP: Oddo confirms rating after results

(CercleFinance.com) - Oddo believes that German software group SAP last night pre-announced Q1 2021 results that overall were better than expected, with revenues of 6.
35 billion euros, 1.6% above expectations.

The broker says that this outperformance is driven by very good license sales, which are up 11% at constant exchange rates, while the market was expecting a fall (Consensus: -18% rep; ODDO BHF: -9% at constant exchange rates).

The analyst also points out that SAP reported a non-IFRS operating profit of 1.74 billion euros, 19% above the consensus. The group's operating margin was 27.4%, up 490 bp at constant exchange rates, or 4 points above expectations.

The group is only marginally raising its annual guidance: SAP expects Cloud & Software growth of +1% to +2% at constant exchange rates (vs. 0% to 2% at constant exchange rates previously). In essence, SAP is marginally raising cloud revenue growth (+14% to +18% vs. +13% to +18% previously), the broker added.

Oddo confirms its Outperform recommendation on the stock, along with its target price of 138 euros.

The share is up over 4% on Wednesday morning, largely outpacing a flat index in Frankfurt.


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