Sage Group plc: Strong Performance and Growth Prospects Support Buy Rating

Analyst Charles Brennan of Jefferies maintained a Buy rating on Sage Group plc (SGE – Research Report), with a price target of p1,500.00.

Charles Brennan’s rating is based on Sage Group plc’s solid performance in the first half of 2025, where the company reported revenues and annual recurring revenue (ARR) in line with expectations, and earnings before interest and taxes (EBIT) slightly exceeding forecasts. Despite a preference for top-line and ARR outperformance over margin improvements, the company’s ability to maintain durable growth and sensible capital allocation, including an extended buyback program, is commendable.
Furthermore, Sage achieved an organic revenue growth of 8.9%, closely aligning with the consensus of 9.2%, and an organic recurring growth of 9.3%, slightly below the consensus of 9.9%. The EBIT margin was slightly ahead, surpassing consensus by 2%. With an ARR growth of 10% and new customer acquisition of £190 million over the past year, the performance is solid, especially given the uncertain macroeconomic environment. The guidance for organic total revenue growth of 9% or above, with operating margins expected to trend upwards, supports the Buy rating as it indicates potential for continued financial strength.

In another report released on May 9, Citi also maintained a Buy rating on the stock with a £14.50 price target.