SAP "underweight," target price raised

20.10.06 - J.P. Morgan Securities

LONDON, October 20 (newratings.com) - Analyst John Segrich of JP Morgan maintains his "underweight" rating on SAP (SAP). The target price has been raised from ?120 to ?140.

In a research note published this morning, the analyst mentions that the company has indicated that its license growth is unlikely to reach the higher end of its 15%-17% target for 2006. The analyst believes that SAP would not be able to meet the lower end of this guidance range and expects the company to report 12.9% license growth for the year. SAP has also withdrawn its 30% margin target for next year, citing flexibility to invest for growth.