Sage rebounds from heavy losses; Investec upgrades to 'hold'

25th Jun 2015 09:41

Shares in software company Sage pushed up 1.2% on Thursday as Investec upgraded the stock, following sharp losses in the previous session on the back of its Capital Markets Day.Investec raised the stock to 'hold' from 'sell' and lifted the price target to 535p from 360p."The capital markets day was positive but understated in terms of quantifying financial impact, leading a frothy share price to react in classic travel-and-arrive fashion," it said, adding that the new growth strategy looks sound in the near term.Investec said that its basic view is that the next 12-18 months is full of low hanging fruit, but thereafter the transition becomes tougher."We would not underestimate the pivot required in the growth strategy, especially in the US, away from price rises and premium support upsell, especially with Sage Life seemingly marking a rise in cloud adoption amongst 10-200 employee customers," it said.