SAP Shares Forecast: Analysts Lower Targets After Difficult Start to 2026

SAP shares (ETR: SAP) have endured a bruising start to 2026, with the stock closing January down 15.54% at €170.56 after touching €162.12, its lowest level in almost two years.

The sharp decline followed a disappointing fourth-quarter performance that saw the German software giant miss critical cloud growth targets, prompting a wave of downgrades and target price reductions from analysts across Wall Street and European investment banks.

The selloff was triggered by SAP's current cloud backlog growth coming in at 25% for the fourth quarter, falling short of the anticipated 26% and marking the slowest expansion rate in nine quarters.

While management had expressed confidence in meeting or exceeding this all-important metric, the miss has forced markets to reassess the company's near-term growth trajectory and question whether the momentum that drove shares higher in previous years has begun to fade.

SAP Price Targets Cut Across The Street – Upside Remains

BMO Capital moved swiftly to adjust its outlook, slashing its price target from $320 to $245 while maintaining an Outperform rating. The firm cited the guidance miss as justification for lowering its fiscal year 2026 cloud growth estimates from 26% to 24% year-over-year in constant currency terms.

This downward revision reflects growing concerns that SAP's cloud transition, once viewed as a reliable growth engine, may be decelerating faster than anticipated.

Other major banks followed suit with similar reductions. JPMorgan cut its target from €290 to €260, Deutsche Bank reduced its forecast from €270 to €220, Morgan Stanley trimmed from €285 to €240, and Berenberg lowered from €280 to €250.

Despite these cuts, most firms retained positive ratings such as Overweight or Buy, suggesting belief in SAP's long-term fundamentals remains intact even as short-term expectations are recalibrated.

The most significant shift came from Citizens, which downgraded SAP from Outperform to Market Perform. The firm's analysis pointed to a potentially more structural challenge: that SAP may have passed the peak of the S/4HANA upgrade cycle as an incremental growth driver.

This enterprise resource planning software has been central to SAP's cloud strategy, and any slowdown in adoption could have meaningful implications for future revenue streams.

Citizens also noted that SAP's Business AI product cycle remains in its early stages, suggesting that while artificial intelligence offerings may eventually provide a new growth avenue, they are not yet mature enough to offset weakening momentum elsewhere in the portfolio. This creates a gap period where legacy growth drivers are fading while next-generation products have yet to gain meaningful traction.

The SAP share price performance over the past year tells a sobering story. Shares are now down 36.48% on a twelve-month basis, placing SAP firmly in bear market territory and erasing significant shareholder value. This extended decline reflects not just the recent quarterly miss but broader concerns about competitive pressures in the cloud software market and SAP's ability to maintain its historical premium valuation.

Markets will now focus on whether SAP can stabilize cloud backlog growth and demonstrate that the fourth quarter represented a temporary stumble rather than the beginning of a sustained slowdown. With analyst targets now ranging from €220 to €260, indicating a healthy perceived upside from the current price, the stock faces a credibility test in upcoming quarters to prove it can reignite growth and justify renewed confidence.