CCB Strength Matters More

Research evidence excerpt

CCB Strength Matters More

Idea

July 24, 2026 12:39 AM GMT

Morgan Stanley & Co. LLCMSAP SE | Europe Adam Wood

Equity Analyst

CCB Strength Matters More Adam.Wood@morganstanley.comMorgan Stanley & Co. International plc+ +1 212 761-3656

George W Webb

Q2’s 26% CCB print confirms the core cloud conversion story Equity Analyst

George.Webb@morganstanley.com +44 20 7425-2686

remains intact, while early AI evidence is encouraging. Higher Mark Hyatt

Equity AnalystR&D and M&A dilution drive modest FY26 EBIT cuts, but FY27

Mark.Hyatt@morganstanley.com +44 20 7677-3663

growth and margin frameworks hold. At €128 and below 1x PEG, William Richards

we see the shares recovering ground, up LSD % today. Research Associate

William.Richards1@morganstanley.com +44 20 7425-0269

Key Takeaways SAP SE (SAPG.DE, SAP GY)

ADRSAP.N

2Q26 results reassure that the core cloud growth story remains on track, despite Technology - Software & Services | Germany

signs of wider sector bookings uncertainty elsewhere Stock Rating Overweight

Industry View In-Line

Q2 AI commentary unlikely to shift SAP's perceived positioning, awaiting direct Price target €190.00

monetisation evidence, but early customer proof points a small positive Shr price, close (Jul 23, 2026) €128.32

52-Week Range €258.70-127.50

Q2 EBIT missed and the FY26 EBIT guide was lowered, but partly on R&D-centric Mkt cap, curr (mm) €150,934

Net debt (12/26e) (mm)††* €(1,766)

investments (inorganic and organic), which we see as the right strategic decision EV, curr (mm)* €148,041

Overall a reassuring print on the growth story, which we expect to outweigh the †† = (net cash)/net debt

* = GAAP or approximated based on GAAP

minor EBIT cuts. We expect the shares to trade up low-single-digit %. Fiscal Year Ending 12/25 12/26e 12/27e 12/28e