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On Wednesday, Jefferies adjusted its price target on Sage Group (LON:SGE:LN) (OTC: SGGEF) shares, a software company, reducing it to GBP13.00 from the previous GBP14.00. Despite this change, the firm maintains a Buy rating on the stock.
The decision to lower the price target comes as Sage's new business momentum has not met analyst expectations. The firm has revised its projections slightly downward, by approximately 1-2%, placing them around 4% below the consensus.
Jefferies has expressed confidence in Sage's business model, particularly highlighting the strength and sustainability of its growth. The firm acknowledges the recent underperformance but remains optimistic about the company's potential for continued double-digit EBIT growth.
The revised price target of 1300p (GBP13.00) reflects Jefferies' attempt to address minor downgrades in the company's performance preemptively. Despite the adjustment in expectations, the firm's outlook on Sage remains positive, underpinned by the resilience of its subscription model.
In summary, while Jefferies has adjusted its price target for Sage to GBP13.00, the firm's recommendation for investors to buy has not wavered. The belief in the company's capacity to sustain growth in earnings before interest and taxes (EBIT) continues to support this stance.
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