SAP to report FY results on Wednesday 24th January (pre-market) We highlight 3 key items in each of the FY23 print and FY24 guide to focus on. For 2023 we would focus on Current Cloud Backlog (CCB) growth as the chief driver of 2024 Cloud Revenue growth, FCF as a driver of market confidence and adj. EBIT growth where we continue to see upside to guidance this year. For 2024 guidance we see the priority as the relative guide vs. the required trajectory to 2025 targets (Cloud revs, EBIT, FCF). In addition, a commitment to double-digit group revenue growth could drive revenue upside, while detail on implied EBIT growth and FCF conversion will also be important. We dive into the moving parts in detail in this report. SAP into new territory: top line growth, margin expansion, mid-teens EPS CAGR The Software sector performed well in 2023 (IGV ETF +58%), sector valuation multiples have re-rated driven by an assumed software market recovery in 2024 and by expectations of GenAI launches benefitting leading software vendors. We update our TP based on our Global Software valuation framework in line with our broader Software 2024 Outlook, published in tandem. We justify SAP''s higher TP P/E multiple (29x Non-IFRS vs. 25x historic peak) given the ~2x uplift in expected EPS CAGR to ~15% and the benefit of its Cloud transition and GenAI opportunity ahead. SAP remains top pick in European Software, raising TPs to EUR190 / USD208 We update our estimates with detail provided within on key items (FX, factoring, Cloud Gross margin, Cloud growth), with net impact of 1% changes to EPS. We also update our model to incorporate SAP''s new financial reporting framework as detailed in December by the CFO. SAP remains our top pick in European Software as we see a combination of Consensus estimate upgrades plus strategic execution driving a re-rating as SAP becomes recognised as a leading Enterprise cloud software vendor warranting a comparable valuation multiple to global...