SAP "buy," target price reduced

25.01.07 - Dresdner Kleinwort Wasser.

LONDON, January 25 (newratings.com) - Analysts at Dresdner Kleinwort maintain their "buy" rating on SAP AG (SAP). The target price has been reduced from ?53 to ?43.

In a research note published this morning, the analysts mention that SAP's plan to invest up to ?400 million in the mid-markets business over the forthcoming two years would adversely impact the company's margins in 2007 as well as the growth prospects for 2008. There is uncertainty surrounding the size and timing of the return from the investments, the analysts say. Dresdner Kleinwort adds, however, that SAP's core business is expected to maintain double-digit growth into 2008.