SAP to report Q3''23 results Wednesday 18th October, after US market close A boring Q3 should be enough to protect SAP''s relative safe haven status this earnings season, in our view. We expect the market to focus on current demand indicators Cloud Revenue growth and Current Cloud Backlog (CCB) growth as priorities, with one eye on the outlook for FY23 operating profit (where we now see upside) and confidence on 2024 acceleration as secondary priorities. The shares have been tethered to the EUR120-130 range since Q2 results and likely require a catalyst to break out; we see downside risk should CCB or Cloud Revenue growth disappoint, and upside risk if Operating profit trends continue and show signs of upside to current estimates. H2 profit estimates look too conservative. Raising estimates and see upside to expectations Our analysis of the implied H2 operating profit slowdown indicates upside to FY23 Cons estimates, even after adjusting for one-offs in the H2''22 comparator and additional GenAI product investment this year. Adj. EBIT was +20% ccy in H1 (and by more underlying, detail within) yet Cons currently models a sharp slowdown to just +4% ccy in H2, which we think is too conservative. We lift 2023 EBIT / EPS estimates by 2-3% and now see a path to exceed FY guidance of 8-12% adj. EBIT growth (ccy), BNPPE +13.6% / Cons +11%. SAP our top pick in European Software. SAP remains our top pick in European Software; defensively positioned with a multi-year product upgrade cycle underway and an undemanding valuation at ~20x P/E or ~5.5% FCF yield for ~20% organic EPS CAGR and improving cash conversion (all 2025 Non-IFRS). There is also a ''GenAI'' kicker to the story, with SAP''s GenAI copilot recently announced (''Hey Joule: supercharge my business''), where we expect more details in the coming weeks. As our recent strategists highlighted (KNOW THY NEIGHBOUR) SAP ownership continues to inch higher but remains well below historic levels pre-2020...