SAP's Buyback of Confidence: Cloud Backlog Hits €24.1 Billion, but Brokers Can't Agree on the Price
Published on 10/24/2026 at 14:21 | Editorial boerse-global.de
Two of Germany's most closely watched brokerages looked at the same SAP quarter and reached opposite conclusions about what investors should do with the stock. Deutsche Bank lifted its price target to €235 from €200 and kept its buy rating. DZ Bank raised its target to €170 from €120 — and stuck with its sell recommendation.
That split is the real story for anyone holding the stock. Higher targets on both sides of the fence do not add up to a unified bullish signal. Both houses now see more value in the shares than they did before. They still disagree, sharply, on whether that value is worth buying.
The quarter that pleased the crowd
The operating numbers gave the optimists plenty of ammunition. SAP's Current Cloud Backlog — contracted cloud revenue due in the next twelve months — reached €24.1 billion in the third quarter of 2026, up 28% year over year. Total revenue came in at €10.27 billion, with cloud revenue climbing 26% to €6.67 billion. Operating profit advanced 18% under both IFRS and Non-IFRS.
Goldman Sachs moved quickly. Analyst Mohammed Moawalla raised his target to €258 from €230 and reaffirmed his buy call, pointing to the strength of the backlog and arguing SAP should keep widening its lead over rivals. Other analysts also praised the cloud transformation and the commercial traction of the company's AI offering.
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Yet the shares slipped yesterday, according to media reports, as profit-taking after the recent recovery set in. A weak technology sector and cautious commentary on the near-term monetization of artificial intelligence added to the drag.
A caveat, not a warning
What unsettled the market was management's own framing. On Thursday, SAP's leadership flagged a possible slight slowdown in cloud backlog growth for the fourth quarter. That distinction matters: the company described a slower pace of expansion, not a shrinking backlog. Even so, it puts a ceiling on hopes for further acceleration.
The tension between a strong quarter and a guarded year-end outlook is not a contradiction. A blowout three months does not settle every question about the quarter to come — and at SAP, the final quarter carries outsized weight. Roughly half of the year's bookings land in that period, which is why the fourth-quarter bookings figure and the 2027 cloud outlook will dominate the debate until January.
Valuation: cheaper than history, not necessarily cheap
On the numbers, SAP trades at 29.4 times expected 2026 earnings. Its five-year average multiple is 46.0. The gap suggests the stock is priced well below its long-run norm — but a forward multiple is only as good as the earnings forecasts beneath it, and a discount to history is not proof of undervaluation.
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That is precisely where the two brokerages part ways. Recurring cloud contracts give the business a sturdy floor, and the backlog is the key gauge of whether new bookings can keep the growth path intact. Whether that is enough to justify buying at current levels is a judgment call the targets alone cannot settle.
SAP plans to publish preliminary results for the fourth quarter and the full 2026 financial year on January 28, 2027. Until then, the question investors will keep asking is simple: can the company back up the optimistic case with another round of bookings, or will the year-end slowdown management hinted at show up in the numbers?
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