(Bloomberg) -- SAP SE’s accelerating revenue growth, along with the potential for further buybacks, can fuel fresh gains in a stock whose rally has helped push Europe’s benchmark equity index to a record high, according to one of the software giant’s most bullish analysts. 

Having risen 60% in the past year, SAP has a potential 17% of further upside by the end of 2025, according to JPMorgan Chase & Co. analyst Toby Ogg. Under the most bullish scenario, those gains might extend to 80%, he said.

“We believe SAP is in the ‘sweet spot’ with growth accelerating, margins expanding and cash conversion improving,” Ogg wrote in a note Tuesday. He raised his price target to €205, the highest of any analyst tracked by Bloomberg.

SAP, along with other regional champions including chip-equipment maker ASML Holding NV and drugmaker Novo Nordisk A/S, have been key in pushing the Stoxx 600 Index to a record high this month. All three stocks have risen more than 15% year-to-date.

According to Ogg, growth potential of Europe’s biggest software company is still under-appreciated. He sees potential for customers with big tech spending budgets to shift to SAP’s cloud-based offerings from enterprise resource planning software that is still hosted locally.

In January, the company raised its free cash flow guidance for the next year and announced a restructuring program to increase focus on artificial intelligence.

In addition to accelerating sales growth, SAP’s margins are set to improve in the next three years, Ogg said, expecting AI tools to boost internal efficiency. Taken together, the analyst expects SAP to build a nearly €15 billion ($14 billion) net cash position in 2027, paving the way for a ramp-up in buybacks.

In a bull case that sees a significant portion of SAP’s future free cash flow being used in buybacks, the stock could reach €315 a share, Ogg predicted.

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