Berenberg Updates Price Target, Estimates for SAP After 'Positive' Q2 Performance

04:24 AM EDT, 07/27/2026 (MT Newswires) -- Berenberg revised its price target and earnings assumptions for SAP (SAP.F), as the research firm noted the German software company's "positive, albeit not clean," second quarter and better-than-expected current cloud backlog result. "If customers are indeed facing software budget pressures due to rising [artificial intelligence] costs, the robust CCB performance in Q2 suggests that SAP is not being affected by this dynamic. This result, combined with similar commentary from peers last week, has relieved some of our concerns regarding SAP's near-term cloud growth potential, leading us to modestly increase our revenue estimates. However, while there was no evidence of AI negatively affecting top-line growth, it affected the cost base, with expenses spiking unexpectedly in the quarter due to AI-related investments. We are confident that management will bring costs under control going forward and, when combined with the strong margin performance from Q1, we currently see no risk to the company's reiterated 2026 targets," according to a Monday note. As such, the research firm lowered its margin forecasts to account for elevated AI cost pressures, which led to an average 1.25% reduction in free cash flow estimates across the forecast horizon. Consequently, Berenberg trimmed its price target to 205 euros from 215 euros, while leaving its buy rating unchanged. "While we see potential for further backlog growth in H2, we prudently model a more modest 25 [basis point] per quarter of growth deceleration amid the current macro and enterprise AI spending backdrops," analysts added. Accordingly, the research firm raised its 2026 organic CCB exit run-rate projection by 50 basis points to between 24% and 24.5%, driving a corresponding 50-basis-point lift to its average revenue estimates.