Saga (LON:SAGA) Announces Earnings Results

Saga (LON:SAGA) issued its earnings results on Wednesday. The company reported GBX 20.50 earnings per share (EPS) for the quarter, Digital Look Earnings reports. Saga had a negative net margin of 1.53% and a negative return on equity of 15.72%.

Here are the key takeaways from Saga’s conference call:

• Strong first-half performance: Underlying revenue rose 14% to £366 million, while underlying profit before tax nearly doubled to £46.6 million, driven by growth across travel and insurance.
• Saga raised full-year underlying profit guidance to £65 million–£70 million, versus £44 million last year, and said it now expects to reach its medium-term targets of £100 million profit and leverage below two times ahead of January 2030.
• Ocean Cruise remained the main growth engine, with profit before tax up 38%, per diems up 13% and strong forward bookings supporting continued pricing power; group net debt fell to £429.1 million and leverage improved to 2.7 times.
• The insurance transformation is gaining traction, with Insurance Broking profit before tax up 75%, policies in force up 5% and lower operating costs expected as the Ageas partnership and simpler operating model mature.
• Management flagged risks from low river levels, which are expected to reduce full-year River Cruise profit, and Middle East disruption affecting the Holidays business; Ageas-related exceptional costs will also continue next year, albeit at a lower level.

Saga Stock Down 3.4%

Shares of LON:SAGA opened at GBX 760 on Thursday. The business’s 50 day moving average is GBX 655.47 and its 200 day moving average is GBX 598.83. The stock has a market cap of £1.10 billion, a P/E ratio of 316.67, a price-to-earnings-growth ratio of 1.22 and a beta of 2.02. Saga has a 52-week low of GBX 237 and a 52-week high of GBX 797. The company has a quick ratio of 0.67, a current ratio of 1.35 and a debt-to-equity ratio of 934.58.

Wall Street Analyst Weigh In

Several brokerages have recently weighed in on SAGA. Deutsche Bank Aktiengesellschaft upped their price target on Saga from GBX 795 to GBX 855 and gave the company a “buy” rating in a research report on Thursday. Berenberg Bank boosted their price objective on shares of Saga from GBX 1,025 to GBX 1,130 and gave the company a “buy” rating in a research report on Wednesday. Two research analysts have rated the stock with a Buy rating, According to data from MarketBeat.com, Saga has a consensus rating of “Buy” and a consensus price target of GBX 992.50.

Key Saga News

Here are the key news stories impacting Saga this week:

• Positive Sentiment: Turnaround delivering results: Saga said its restructuring and focus on older customers are beginning to pay off, with the company reportedly “significantly ahead” of its growth plans. Improving operating performance supports the investment case. Saga’s Turnaround Starts Paying for Itself
• Positive Sentiment: Profit outlook strengthened: Saga forecast a substantial increase in annual profit, citing strong demand for cruises and insurance. The outlook suggests its core businesses are benefiting from pricing, customer demand and the turnaround strategy. UK’s Saga forecasts annual profit jump
• Positive Sentiment: Analyst upgrade: Berenberg raised its price target from GBX 1,025 to GBX 1,130 and maintained a “buy” rating. The higher valuation target provided an additional catalyst and helped the stock reach a new 52-week high. Saga stock price target raised at Berenberg Bank
• Neutral Sentiment: Quarterly results mixed: Saga reported quarterly earnings of GBX 20.50 per share, but still posted a negative 1.53% net margin and negative 15.72% return on equity. These figures show that profitability remains fragile despite the improving outlook. Saga quarterly earnings report

Insider Activity

In related news, insider Mark Watkins bought 276 shares of the company’s stock in a transaction on Wednesday, July 15th. The shares were acquired at an average price of GBX 652 per share, with a total value of £1,799.52. Also, insider Mike Hazell bought 276 shares of the firm’s stock in a transaction that occurred on Wednesday, July 15th. The shares were purchased at an average cost of GBX 652 per share, with a total value of £1,799.52. Insiders own 30.38% of the company’s stock.

About Saga

Saga exists to deliver exceptional experiences for our customers every day, whilst being a driver of positive change in our markets and communities.