Zacks Analyst Blog Highlights: SAP, Wal-Mart, Apple, Business Objects and Oracle

Business Wire, Jan 18, 2008

CHICAGO -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: SAP (NYSE: SAP), Wal-Mart (NYSE: WMT), Apple (Nasdaq: AAPL), Business Objects (Nasdaq: BOBJ) and Oracle (Nasdaq: ORCL).

See the latest posts to the Analyst Blog by visiting: http://at.zacks.com/?id=2673

Here are highlights from Thursday's Analyst Blog:

Near-Term Pressure for SAP

We expect SAP (NYSE: SAP) to report an in-line 4Q07. The company met our expectations in the third quarter, despite the continued strength of the euro, which had a negative 5% impact on the company's earnings during the quarter. The company continued its growth in Asia and Europe. Additionally, the company proved it was still competitive with the larger deals, winning Wal-Mart (NYSE: WMT) and up-selling to Apple (Nasdaq: AAPL) during the third quarter.

We continue to rate shares of SAP a Hold, however, as the strength of the euro against the dollar and the Business Objects (Nasdaq: BOBJ) acquisition may hinder growth, although we believe shares are in-line with our current valuation of the company. We have fixed our target price at $51.50 based on the company selling at 20.6x our 2008 EPADS estimate of $2.50 over the next six months.

If SAP continues to move forward with an acquisition growth strategy, its P/E may come close to resembling that of Oracle (Nasdaq: ORCL), although on a price/sales basis, SAP is valued lower than these companies. Until the company can show it has the ability to integrate the BOBJ acquisition, its shares will continue to be under pressure.

Despite this, the uncertainty as to why SAP plans to acquire Business Objects and its changed growth strategy remain questions that could hinder the company's stock performance in the near-term. We continue to rate shares of SAP a Hold with a target price of $51.50 over the next six months.

See the latest posts to the Analyst Blog by visiting http://at.zacks.com/?id=2645

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