Saga share price surges as JPMorgan lifts rating on group

Shares in Saga (LON:SAGA) have surged in London this Wednesday as JPMorgan Cazenove lifted its rating on the cruises-to-insurance group for the over-50s. The news marks a boost for the company whose shares came under pressure earlier this month as it booked a £310-million charge and trimmed its payout to shareholders.

As of 10:39 BST, Saga’s share price had surged 5.13 percent to 60.50p, outperforming the FTSE 250 which has inched marginally into positive territory and currently stands 0.11 percent higher at 19,929.02 points. The group’s shares have given up more than 54 percent of their value over the past year, as compared with about a 1.3-percent dip in the mid-cap index.

Saga share price rises

Shares in the lifestyle group for the over-50s have been in demand today as JPMorgan Cazenove lifted its rating on the company from ‘underweight’ to ‘neutral’ today, without specifying a price target on the shares. Proactive Investors quoted the broker as commenting that it believed that the market was now aware of the challenges facing Saga, suggesting a more balanced risk/reward ratio.

The analyst comments follow the insurer’s full-year update earlier this month which revealed a loss before tax. The company said at the time that it was facing long-term challenges and that it was launching ‘a fundamental change’ to the business.

Analyst ratings update

The three analysts offering 12-month targets for the Saga share price for the Financial Times have a median target of 105.00p on the shares, with a high estimate of 180.00p and a low estimate of 65.00p. As of April 19, the consensus forecast amongst five polled investment analysts covering the mid-cap group advises that the company will outperform the market.

Saga is scheduled to hold its annual general meeting in June, with the exact date to be specified at a later time.