SAP shares gained ground on the Frankfurt Stock Exchange on Friday, on the strength of a note from Jefferies in which the broker considered that the German software giant's growth could not be called into question.

At around 1:30pm, the share price was up 0.9%, while the DAX index advanced by 0.8%. With a gain of over 17% since January 1, the stock is currently the second-best annual performer on the index, behind Siemens Energy (+19%).

In a research note, Jefferies acknowledges that the group delivered contrasting fourth-quarter results, but is reassured by the level of order backlog in its cloud activities.

This sustained momentum in the cloud means that SAP can now credibly claim growth of 10%-12% per annum, compared with 8%-10% to date", he explains.

With growth of 12%, as we expect by 2026, SAP would be growing in line with American leaders such as Adobe, Intuit and Salesforce", adds the broker.

"This factor should remove any ceiling limiting its valuation in the short term", he concludes.

Under these conditions, Jefferies raises its recommendation from "keep" to "buy", with a price target raised to 190 euros from 135 euros previously.

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