Deutsche Bank’s European Research team cut its price target on Sage (LSE:SGE) to 900p from 1,000p, and kept a Hold rating, after last week's first-half financials.
Market sentiment is weighing on the UK accounting and payroll software group, the bank reckons.
DB analyst Johannes Schaller noted that Sage delivered a solid half, with organic total revenue roughly 10% higher year‑on‑year, underlying ARR up 11% and net revenue retention improving 1 percentage point to 102%, trends he attributes to Copilot/AI upselling and lower churn and that support management’s upgraded guidance to above 9% for FY26 with scope for nearer 10%.
He flags, however, that margin momentum is unlikely to hit the upper end of Sage’s 50-100bp annual expansion ambition this year as the group prioritises product and AI investment, a dynamic that underpins Deutsche Bank’s trimmed target.
Schaller concludes that "sentiment overshadows fundamentals", with AI upsell traction and margin execution his key near‑term proof points.
