SAP Clears Regulatory Hurdles and Buys Back Stock, Even as Analysts Temper Their Enthusiasm

SAP closes German and EU probes, buys back €344M in shares, but faces analyst downgrades and price target cuts despite 20% monthly gain.

The past few weeks have delivered a mixed bag for SAP investors. On one hand, the software giant has methodically dismantled its regulatory overhang, while simultaneously pressing ahead with a hefty share buyback. On the other, the analyst community has been busy trimming price targets and, in at least one prominent case, downgrading the stock entirely.

The most significant regulatory development came on 30 July, when Germany's Federal Cartel Office (Bundeskartellamt) wrapped up its preliminary probe into the Walldorf-based company without launching a formal abuse-of-dominance proceeding. The authority concluded that customers and partners retain sufficient technical means to extract data from SAP systems, meaning the company's API policy does not unduly restrict access.

That decision from Bonn followed a separate agreement with the European Commission in early July. Brussels accepted SAP's binding commitments concerning support services for on-premises ERP systems in the aftermarket. With both investigations now closed, the company has removed a layer of uncertainty that had hung over its market position in the ERP segment for months.

Buyback Machine Keeps Running

While the legal picture was clearing, SAP continued executing its capital return programme. Between 27 and 31 July, the company repurchased roughly 2.18 million of its own shares on the Xetra trading platform at an average price of €157.62, amounting to a total outlay of approximately €344.3 million.

That activity forms part of a buyback scheme announced in January, with a ceiling of €10 billion and a runway extending to the end of 2027. The first tranche had already concluded in early April, with just over 16.28 million shares acquired at an average price of €161.16.

Analyst Caution Creeps In

Yet the share price story has been less straightforward. Berenberg trimmed its price target from €215 to €205 roughly two weeks ago, though the house maintained its constructive stance on the stock. The €10 reduction came amid a broader recalibration among several banks, which have grown more cautious on valuation without abandoning their fundamental conviction in the business model.

That caution has been compounded by a notable move from UBS, which downgraded SAP from "Buy" to "Neutral" last Saturday. Curiously, the Swiss bank simultaneously raised its price target from €164 to €201. The contradictory signal triggered some profit-taking, though the subsequent share price movement of 0.9 percent suggests the initial shock has largely dissipated.

Reuters placed the reaction in a wider context, noting that SAP ranked among the heaviest drags on European trading at the time, with weak signals from the US software sector adding to the pressure. The combination of sector-wide scepticism and a high-profile rating change pushed the stock down more sharply than the fundamental news flow alone would have warranted.

A Stock Well Off Its Highs

The current share price of around €189-191 sits roughly 22 percent below the 52-week high of €242.00, reached in October of last year. That gap illustrates just how far sentiment has cooled from the heights of the previous autumn.

Still, the recent trajectory tells a more nuanced story. On Monday, the stock traded at €190.56, marginally below Friday's closing level of €190.86 — a modest pullback in the low single-digit percentage range that does little to dent the broader recovery. Over the past 30 days, the shares have gained 20 percent, a sign that the market has begun to reward both the operational progress and the regulatory clarity.

Big-Ticket Wins Underpin the Narrative

Operationally, SAP continues to land marquee customers. NTT DATA recently opted for SAP SuccessFactors and the SAP Business Data Cloud, paired with the Joule AI assistant, to consolidate several legacy HR systems onto a single platform. Decisions of this calibre reinforce the company's standing in the cloud arena, a trend already visible in the second-quarter figures, when the cloud order backlog climbed 27 percent to €22.9 billion.

With a market capitalisation of €220.41 billion, SAP remains one of Europe's largest software companies. The question occupying investors now is whether the recent spate of price target adjustments represents a short-term correction or the opening chapter of a longer re-rating. The combination of closed regulatory proceedings, ongoing buybacks and robust large-enterprise demand provides a solid foundation — though the debate over valuation and the pace of AI integration is unlikely to fade quickly.