SAP
SAP SE
$172.02
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 3.7% below fair value
You pay
$172.02
Bear
$149.54
Fair
$178.62
Bull
$207.70
Bear
$149.54
-13.1%
$7.07 × 18x P/E
Fair
$178.62
+3.8%
$7.07 × 22x P/E
Bull
$207.70
+20.7%
$7.07 × 25x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
24.3x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $240.67 from 43 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $178.62 per share.
Warnings
The company pays out 148% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $240.67 (from 43 analysts). Our estimate is 37% below the consensus -- consider that gap carefully.
Financial statements were converted from EUR into USD using EURUSD at 1.1536 USD per EUR.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples