SAP Q3'26 preview - Bar higher post rebound; expecting broadly in-line results

With expectations now more positive following SAP's Q2 current cloud backlog (CCB) positive surprise, valuation re-rating (SAP's 12m P/E multiple re-rated from ~16x in July to ~23x currently), pockets of improving trends in the software peer ecosystem (e.g. Salesforce's cRPO beat and acceleration; Oracle's cloud apps business accelerating slightly) and recent positive commentary from SAP's CEO at a conference in early September, the bar for stock price upside is higher from here. That said, we don't foresee any negative surprises relative to consensus into Q3 (21st October) and are modelling numbers which are broadly in line with consensus;