SAP (SAP, Financial) has reaffirmed its financial outlook despite the challenges posed by a dynamic economic landscape. The company anticipates continued robust growth in its cloud revenue, projecting figures between EUR 21.6 billion and EUR 21.9 billion at constant currencies for 2024, representing an increase of 26% to 28% from previous levels.
In addition, SAP expects combined cloud and software revenues to reach EUR 33.1 billion to EUR 33.6 billion at constant currencies, marking an 11% to 13% rise. The company is also targeting non-IFRS operating profits in the range of EUR 10.3 billion to EUR 10.6 billion, reflecting an expansion of 26% to 30% from the prior year.
Moreover, SAP forecasts approximately EUR 8.0 billion in free cash flow at actual currencies, a significant jump from the EUR 4.22 billion projected for 2024. The company maintains an effective non-IFRS tax rate expectation of about 32%, slightly lower than the 32.3% anticipated for 2024.
Despite these positive projections, SAP acknowledges that the growth of its current cloud backlog at constant currencies may experience a slight deceleration by 2025.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for SAP SE (SAP, Financial) is $315.19 with a high estimate of $368.57 and a low estimate of $288.13. The average target implies an upside of 24.88% from the current price of $252.40. More detailed estimate data can be found on the SAP SE (SAP) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, SAP SE's (SAP, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SAP SE (SAP, Financial) in one year is $175.91, suggesting a downside of 30.31% from the current price of $252.4. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SAP SE (SAP) Summary page.
