HSBC Upgrades SAP SE (SAP) Despite Cutting the Target. What Does That Tell You?

SAP SE (NYSE:SAP) is one of the best falling stocks to invest in now. On April 22, HSBC analyst Abhishek Shukla upgraded SAP SE (NYSE:SAP) from Hold to Buy and trimmed the price target to €182 from €187.

The analyst argued that SAP’s steep valuation decline has created a compelling buying opportunity. He pointed to the fact that SAP’s shares are trading at just 19.8 times its next-twelve-months earnings, which is a level that is 41% below the stock’s own 18-month average. This suggests that the market has already priced in a significant amount of bad news, the analyst noted.

Shukla did, however, point out that close peer Oracle Fusion cloud ERP saw its constant currency revenue growth slow from 17% to 14% in the quarter ended February 2026. This is a signal that enterprise cloud demand may be softening more broadly, Shukla noted. On top of that, said Shukla, SAP’s new deal flow in March 2026 may have been weak, partly due to business uncertainty tied to the Middle East conflict.

Those concerns feed into why HSBC’s own earnings estimates for SAP sit well below Wall Street consensus. The firm’s non-GAAP EPS forecasts for 2026-2030 are 4% to 18% below the market’s expectations. This is largely because HSBC believes analysts are overestimating how quickly SAP can shift its customers from traditional on-premise licenses to cloud subscriptions. When completed, this transition typically generates two to three times more revenue per customer for SAP, noted Shukla.

SAP SE (NYSE:SAP) is a multinational enterprise software company that provides solutions for enterprise resource planning, supply chain management, procurement, and customer experience. Its offerings include the SAP S/4HANA and SAP Business Technology Platform.

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