Saga share price: Analysts weigh in on trading update

UBS argues ‘no bad news is good news’

Saga share price: Analysts weigh in on trading update

Analysts have reacted positively to Saga’s (LON:SAGA) latest update, with UBS arguing that ‘no bad news is good news,’ Proactive Investors reports. The lifestyle group posted a trading statement yesterday, posting a small rise in its branded retail insurance policies and revealing flat tour bookings for the period from February 1 to May 31.

Saga’s share price has gained ground in London this morning, having added 0.95 percent to 127.80p as of 09:38 BST. The shares are marginally outperforming the mid-cap FTSE 250 index which currently stands 0.71 percent higher at 20,877.12 points.

‘No bad news is good news’

Proactive investors quoted UBS as saying yesterday that Saga’s trading update confirmed supportive trends highlighted at the group’s full-year results. The comments came as the broker reiterated its ‘neutral’ rating on the shares.

“We view this as encouraging given the inexpensive valuation,” the analysts pointed out, adding that the mid-cap group offered double-digit earnings per share growth (higher than peers), assuming it “can fill its new ships and broking earnings do not grow sideways”.

The newswire further quoted Russ Mould, the investment director at AJ Bell, as pointing to Saga’s loyal customer base as one of the group’s strengths.

“Many have multiple products with the company and some even consider themselves to be part of a community – a situation many consumer-facing companies would love to be in,” he said, adding that the group’s new membership scheme, Possibilities, was part of the company’s “broader drive to have greater engagement with its customers, which seems a very sensible strategy”.

Analyst ratings update

Both Numis Securities and Peel Hunt reaffirmed Saga as a ‘buy’ yesterday, without specifying price targets on the shares. According to MarketBeat, the cruises-to-insurance group for the over-50s currently has a consensus ‘hold’ rating and an average price target of 198.86p.

As of 10:08 BST, Friday, 22 June, Saga PLC share price is 127.90p.

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