Shares in The Sage Group (LON:SGE) have fallen into the red in today’s session, as UBS lowered its rating and valuation on the company. The move comes ahead of the software giant’s trading update next Thursday.
As of 14:53 GMT, Sage’s share price had given up 2.19 percent to 607.40p, underperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.38 percent lower at 6,916.41 points. The group’s shares have given up just a quarter of their value over the past year, as compared with about an 11-percent drop in the Footsie.
UBS trims valuation on Sage
UBS lowered its rating on The Sage Group to ‘sell’ today and trimmed its price target on the shares from 590p to 520p. Proactive Investors quoted the analysts as saying that strategic questions and competitive pressures remained.
“The shares are up 17 percent from their Q4 lows, and while many others in the sector have seen a similar bounce, none other has seen a double-digit EPS downgrade during the period,” the broker explained in a note to clients, adding that while management uncertainty at Sage was now addressed, neither the CEO nor CFO brought the ‘cloud-native experience’ sought at the time of former boss Stephen Kelly’s departure.
UBS further noted that Sage’s planned R&D spend of £250 million paled in comparison to some of its peers such as US rival Intuit.
Other analysts on FTSE 100 group
The 15 analysts offering 12-month price targets for The Sage Group for the Financial Times have a median target of 590.00p on the shares, with a high estimate of 870.00p and a low estimate of 465.00p. As of January 5, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.