Broker: iFAST Financial Pte Ltd
Date of Report: 13 Feb 2026
Excerpt from iFAST Financial Pte Ltd report.
Report Summary
- Stock: SAP (NYSE:SAP)
- Action: Buy the dip
- Target Price: USD 306
- Key Idea: The recent SaaS sector sell-off has created a rare buying opportunity for SAP. Fears of AI disruption are misplaced for SAP, as the company is seen as a structural beneficiary of AI, not a victim. SAP’s integration of AI into its ERP workflows, its mission-critical enterprise data assets, and a record-high cloud backlog offer multi-year revenue visibility and margin expansion.
- Highlights:
- SAP’s AI is deeply embedded into enterprise workflows, driving deal wins and revenue per customer.
- Cloud migration deadlines (2027 ECC end-of-support) create a demand tailwind, with two-thirds of the installed base yet to migrate.
- Cloud backlog at record EUR 77 billion (+30% YoY) ensures strong medium-term growth and high revenue visibility.
- Operating leverage and AI-driven efficiency are expanding margins; 2026 free cash flow guidance at EUR 10 billion.
- SAP trades at 20x 2027E earnings vs. a fair PE of 30x, implying 50% upside to the target price of USD 306.
- Even at a sector de-rating to 25x PE, there is a 25% upside, providing a margin of safety.
- Implication: Investors are advised to take advantage of current sector-wide weakness to accumulate SAP, given its defensible business model, AI integration, and structural growth drivers.
Above is an excerpt from a report by iFAST Financial Pte Ltd. Clients of iFAST Financial Pte Ltd can be the first to access the full report from the iFAST website: https://secure.fundsupermart.com/fsmone/article/rcms354786
