On Tuesday, the stock market in Germany faced a downturn, evidenced by the DAX index closing 0.20% lower. This decline comes as corporate updates take center stage in the ongoing earnings season across Europe, with investors closely monitoring developments. The blue-chip index followed a downward trend seen in other European markets, marking its second day trading in negative territory. SAP ($SAP) emerged as a standout performer, closing 2.14% higher after the company reported a year-over-year increase in total revenue and attributable profit for the third quarter.
The renowned German software firm also raised its guidance for cloud and software revenue for the full year of 2024, demonstrating robust business fundamentals. Analysts from BofA Global Research expressed positive sentiment, stating, "We reiterate our Buy on SAP post a solid print, reiterate Software top pick.
PO increased to (Euro)243 from (Euro)235 (ADR to $261 from $252), reflecting a potential upside of 15%. The Q3 results were pleasantly surprising, backed by a stable CCB at around 27% organic growth, alongside resilient license sales which contributed to an impressive 8% EBIT beat and strong free cash flow performance.
Furthermore, 2024 guidance has been raised on both software growth and improved EBIT and FCF metrics." Looking ahead, analysts forecast a slowdown in organic CCB growth to a healthy 27% in Q4, expecting license phasing to yield an 8% increase in the top line, with projections accelerating to 10.5% growth in 2025.
This trajectory is anticipated to lead to 31% growth in EBIT and 28% growth in underlying free cash flow by 2025, reflecting a solid outlook for the company. Conversely, Allianz ($ALV) experienced a decline of 1.79% following the confirmation of plans to exit its two joint ventures with India's Bajaj Finserv.
This decision was substantiated in a statement to MT Newswires, where Allianz reaffirmed its commitment to the Indian market, marking a significant shift in its operational strategy therein. In addition to corporate updates, economic reports from Eurostat highlighted a rise in the eurozone government's gross debt to GDP ratio, climbing to 88.1% in the second quarter from 87.8% in the first quarter.
Meanwhile, the general government deficit to GDP ratio remained steady at 3% for the same period, reflecting stable fiscal conditions within the Eurozone..