SAP's €275 Case Rests on AI Moving From Pilot to Payoff
Published on 11/09/2026 at 16:31 | Editorial boerse-global.de
JPMorgan has pushed its price target on SAP to €275, but the more telling detail sits beneath the headline number: the new target is dated December 2028, stretched out from an earlier €175 objective that applied to December 2027. The bank's valuation model now runs on roughly 24 times expected earnings, which is why the horizon matters as much as the figure itself.
At the heart of the call is a simple proposition. Analyst Toby Ogg expects SAP to hold an edge as enterprises shift artificial intelligence out of pilot projects and into everyday operations. Once that transition happens, clean and standardized data count for as much as security, control and predictable costs — and SAP's integrated core systems, together with offerings such as Business Data Cloud, BTP and Knowledge Graph, position it to supply exactly that. Feedback from customers and partners points to early traction for the company's own AI tools, and Ogg anticipates rapid payback.
Earnings Growth Carries the Multiple
The optimism has a number attached. JPMorgan sees adjusted earnings per share compounding at around 17% a year through 2028, and the bank lifted its forecasts for adjusted operating profit and adjusted EPS for 2026–2028 by a low-to-mid single-digit percentage. Those revisions are modest next to the target hike, leaving the thesis dependent on operational delivery rather than multiple expansion alone.
Recent results offer some backing. Third-quarter 2026 figures showed cloud backlog up 26%, with cloud revenue climbing 25% at constant currencies — the third consecutive quarter in which backlog beat expectations. Converting that pipeline into revenue and profit is the next test, and the preliminary full-year numbers scheduled for 28 January 2027 will be the first real checkpoint.
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Cheaper Models, Bigger Savings
Cost discipline forms the other pillar. Finance chief Dominik Asam, as reported by Reuters on 28 October, is swapping expensive AI models for cheaper alternatives across parts of SAP's product range, a move expected to help generate more than €2 billion in AI-driven efficiency gains over the next two years.
Product development has kept pace. At SAP TechEd on 27 October the company unveiled enhancements for developers, including additions to Joule Studio, Joule Work and the SAP Business AI Platform. A day later, SAP and NTT announced plans to collaborate on SAP Sovereign Cloud and SAP Business AI, with the proposed offerings aimed in part at regulated industries.
Migration Still Weighs on the Customer Base
How quickly customers can absorb all this depends on where they stand with modernization. A study published Wednesday by Precisely and the Americas SAP Users Group found that 67% of surveyed companies have completed their S/4HANA migration in full or in part, while 53% named custom modifications in SAP ECC as their biggest migration hurdle.
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Meanwhile, SAP's buyback continues. In an interim disclosure roughly two weeks ago, the company reported the purchase of 50,000 of its own shares on Xetra, bringing the total repurchased over the reported acquisition period to about 9.1 million shares.
The stock closed at €209.40 on Friday, down 3.4% in a weak DAX environment, with media reports attributing the move to the broader market pullback.
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