Sage reports earnings May 5, 2016
Thursday 5 May
Although Sage's (SGE) share price has been tracking back, Panmure Gordon's George O'Connor expects the software group to report growth on Thursday, benefitting from improved sales and foreign exchange tailwind.
Revenue should jump from 700 million to 725.6 million in the interims, with cash profit rising from 182 million to 190.1 million.
""While the shares look expensive on an earnings basis (PE 22.9x) we think that hints of a potential H2 beat will keep the shares edging upwards,"" says O'Connor. ""We retain our Hold due to a patchy Euro outlook, the valuation, and Conway's Law. Nonetheless, in the short term, Sage CEO Stephen Kelly has two shots to do his best Billy Flynn and 'give 'em the old razzle dazzle'. Our target price is 608p.