SAP downgraded to "neutral"

14.05.08 - J.P. Morgan Securities

LONDON, May 14 (newratings.com) - Analysts at JP Morgan downgrade SAP AG (SAP-EUR) to "neutral," while revising their estimates for the company. The target price is set to ?37.

In a research note published this morning, the analysts mention that checks indicate that IT spend delays are continuing and a pick-up in software spending is unlikely before 3Q08. SAP?s performance is 2Q08 is likely to remain weak on account of macro challenges, the analysts say. Although the company?s revenues are likely to be weak, delayed BBD spends and cost control initiatives are likely to enable SAP to meet 2008 EPS consensus, JP Morgan adds. The EPS estimate for 2008 has been raised from ?1.85 to ?1.89. The EPS estimate for 2009 has been reduced from ?2.28 to ?2.24.