SAP: Q3 15 conference call feedback: basics right

NEUTRAL, Fair Value EUR70 vs. EUR68 (+5%)
News published on October Wednesday 21, 2015
Share on

We reiterate our Neutral rating but raise our DCF-derived fair value to EUR70 from EUR68 as we increase our adj. EPS ests. by 1% for 2016-17 (+EUR1/share) and our medium-term adj. EBIT margin assumption to 32.5% from 32% (+EUR1/share). The key messages of Q3 15 results are encouraging: 1). S/4HANA is starting to play a role for solid licence sales and is likely to have a positive impact on the low-to-mid single-digit licence sales average decline expected by SAP by 2020; 2). Cloud subscriptions are significantly improving profitability, thus reducing their dilutive effect to the operating margin; 3). For 2016, SAP is poised to exceed EUR500m cost savings from restructurings.  

For more information, please contact  

The Essentials

Everything you need to know about investment banking dedicated to growth
Recent Transactions Highlights
From M&A, to IPOs see what’s been happening at Bryan, Garnier & Co this year
Join our Team
Bryan, Garnier & Co is always looking for talent in all our divisions, at all levels
Explore our opportunities