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Qualtrics Blasts Up After SAP Plans Sale
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Qualtrics Blasts Up After SAP Plans Sale

Increasingly, it looks like trouble is ahead for the economy as a whole. SAP (NYSE:SAP) is taking this ball and running with it, planning a range of cost-savings moves to preserve its cash supplies. That not only means layoffs, but it also means a stock sale that might give it a hand. Investors aren’t pleased with the move so far, as SAP is down in Thursday afternoon trading.

The biggest hit will come when SAP lays off around 3,000 employees. That’s around 2.5% of its overall workforce. This comes despite a report from Davos where SAP’s CEO Christian Klein noted that the company was “very confident about the year ahead” and wasn’t planning layoffs at all. Additionally, SAP also plans to sell off its remaining stake in Qualtrics (NASDAQ:XM) and refocus on its cloud services operation, its largest business.

Interestingly, SAP is eyeing an improvement in adjusted operating profit for the full year. It’s expecting to pull in between 8.8 billion and 9.1 billion euros ($9.58 billion and $9.9 billion) in 2023. That’s actually more than analysts were looking for SAP to bring in. So why the layoffs? Reports noted that the layoffs were “very targeted” as part of a company restructuring in “select areas of the company.”

Investors may not be happy based on today’s share movement, but the same can’t be said for Wall Street. Analyst consensus calls SAP stock a Strong Buy with an average price target of $136.97. Thus, this implies 20.55% upside potential.

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