Sage Group: FY13 results analysts' meeting feedback: fully credibilising FY15 targets
NEUTRAL, Fair Value 395p vs. 365p (+6%)
We reiterate our Neutral rating and raise our DCF-derived fair value to 395p from 365p on upped mid-term lfl revenue growth assumptions (+6% vs. +5% = +25p) and mid-term adj. EBIT assumptions (29.5% vs. 29% = +5p), following yesterday’s FY13 analysts’ meeting. We consider Sage is clearly confident of its FY15 targets (sales up 6% lfl, EBITA margin 28.5-29.5%) with good progress on growth drivers (Sage One, Hybrid cloud, Payments, subscriptions), which are expected to gradually bear fruit on margins over the next two years, while share price will continue to benefit from share buy-backs.
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