Sage Group: Feedback from Analysts Day: the head in the Cloud
NEUTRAL, Fair Value 365p vs. 355p (+5%)
We reiterate our Neutral rating but increase our DCF-derived fair value to 365p from 355p on minor model adjustments and positive effects from the consolidation of shares which occurred in June. Yesterday Sage held an Analysts Day in London. As expected, no trading update was given - FY15 targets being sales up 6% lfl and an EBITA margin in the high 20s - and the presentations were focused on Cloud technology. Our opinion is that Sage is not late in that area as small businesses are conservative regarding Cloud adoption, so we deem the customer transition to SaaS will be slow.
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