SAP "underweight," target price reduced

25.01.07 - J.P. Morgan Securities

LONDON, January 25 (newratings.com) - Analysts at JP Morgan reiterate their "underweight" rating on SAP AG (SAP), while reducing their estimates for the company. The six-month target price has been reduced from ?34 to ?32.

In a research note published this morning, the analysts mention that the company has reported its 4Q06 results broadly in-line with its preannouncement. SAP has guided to its first y/y margin contraction in seven years for 2007 and has projected deceleration in its top-line growth. There is likely to be pressure on the company?s share price in the forthcoming weeks, the analysts say. The EPS estimates for 2007and 2008 have been reduced from ?1.70 to ?1.60 and from 2.04 to ?1.90, respectively.