Share Prices & Company Research

Market News

23 Nov 2020 | 13:06

Canaccord lowers target price on Sage

(Sharecast News) - Analysts at Canaccord Genuity lowered their target price on software group Sage from 790.0p to 700.0p on Monday despite the group's full-year results coming in ahead of expectations. Canaccord highlighted that Sage's full-year sales were £1.90bn, ahead of consensus estimates of £1.88bn, while underlying earnings and earnings per share also beat estimates at £411m and 27.4p, respectively.

In addition to the strong showing, Canaccord also noted that Sage's guidance called for 3-5% organic recurring growth, bang in line with current consensus of 4.0%.

"This equates to total group revenue growth guidance of c. 2-4% (there is only a very small element that is not recurring). FY21 operating margin guidance is for "over 19.0%" vs current consensus of 22.0%. This implies underlying operating profit at a minimum could be around £350m if 19% is assumed," said the analysts.

However, the Canadian bank said margin guidance was "disappointing" at "over 19%" as a result of extra investment in research and development and sales and marketing.

"We understand a 19% margin 'minimum' would apply if revenue growth was at (or exceeded) the top end of the range; therefore, we estimate FY21 margin to be 20-21%," added Canaccord, which also reiterated its 'buy' rating on the stock.
Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
Continuing our Personal Service: View our Latest COVID-19 Update: 30th April 2021
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.