SAP, E.ON Partner To Develop Cost-Cutting Cloud Energy Data Platform
German software maker SAP SE (SAP
) has entered into a partnership with E.ON SE (EONGY
) to create a new billing and data processing technology platform for the energy supplier’s network operations.
The partners expect the first benefits from the project to show as early as mid-2022. In addition, E.ON said that the adoption of cloud solutions should reduce costs by more than 40% in the long-term.
As part of the partnership E.ON aims to use SAP’s cloud solutions to make core processes around billing and information exchange more efficient. As a result, energy suppliers, grid operators and metering point operators will be able to share information faster, more accurately and more easily, while processes such as energy billing and data exchange, will be standardized.
“Partnering with SAP enables us to redesign processes and structures, especially following our acquisition of Innogy,” says E.ON board member Thomas König. “This project will set a new standard in the market. Having maximum automation and standardization on the new platform will make our processes much more efficient.”
SAP shares have been on a gaining path since dropping to a low in March and are now trading 23% higher than at the start of the year. The stock rose 3.9% to $164.87 on Monday after the software maker reported second-quarter earnings that beat analysts’ forecasts and revenue that topped expectations.
Following the financial results, RBC Capital analyst Alex Zukin
raised SAP’s price target to $162 from $150, while maintaining a Hold rating on the shares, saying that Q2 results were “positive”. Despite the encouraging signs for SAP, Zukin believes that the uncertain macro and COVID-19 situation continue to warrant caution for the second half of the year.
Overall, Wall Street analysts have a cautiously optimistic outlook on the stock. The Moderate Buy consensus consists of 5 Buy ratings versus 2 Hold ratings. In light of the recent rally, the $164.71 average price target
implies shares are more than fully valued. (See SAP stock analysis on TipRanks
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