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Activist investor Elliott Management has acquired 1.2-billion-euros-worth of shares in German software company SAP.

The investor said that it supports management’s efforts to improve operational execution, the formation of a special executive board committee and implementation of new, multi-year operational targets.

“Elliott fully supports the initiatives announced today, and we commend CEO Bill McDermott, CFO Luka Mucic and the entire SAP team for taking these steps. The company’s shares were clearly undervalued in relation to its revenue growth, and today’s announcement lays the foundation for substantial value realization,” the activist said in a statement following SAP’s announced first-quarter results.

Shares in the company were up more than 6% at market opening Wednesday in Germany.

On April 24, the company updated its business outlook. SAP forecasted its operating profit will increase by 9.5% – 12.5% to a range of 7.85 billion euros and 8.05 billion euros in 2019, compared with 7.5% – 11.5% expected previously. In 2023, the company said it expects to achieve cloud gross margins of 75% from 53.2% in the first quarter of 2019.

Elliott said the company could double its earnings per share over the next four years to 8.50 euros. In 2018, the company’s earnings per share dropped to 4.35 euros from 4.43 euros. The first quarter of 2019 was impacted by restructuring charges of around 886 million euros and acquisition-related charges due to the acquisition of Qualtrics.

Despite optimism from both the company and Elliott, analysts are cautious about the company’s prospects. HSBC and UBS downgraded the company’s stock at the beginning of April, with the latter saying the company’s goal of 71% gross margin for 2020 seems “unattainable.”

Elliott has been increasingly active in continental Europe. In addition to disclosing a stake in ThyssenKrupp, the activist giant has been in regular discussions with French spirits company Pernod Ricard. Elliott is pushing for margin and corporate governance changes since it unveiled its 2.5% stake in December last year.

SAP shares are up 16% year-to-date and are currently trading at around 101 euros apiece..

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