I'm umming and ahhing currently. I've tried to re analyse them and based future cash flows and earnings power value, I think they are worth between 580-640. That is, if the transformation to SaaS is successful. I only seen one brokers note since their last TU, which sets a target of 625p.
http://www.stockmarketwire.com/article/ ... e-PLC.html
I think most brokers are downbeat on it too:
https://www.marketscreener.com/THE-SAGE ... consensus/
On the last reported earnings they would be PE=23 and DY=2.6% at 630p. They do have an average dividend growth rate of about 8%. Since I've no exposure to the software sector or accounting or SaaS, perhaps I should see I can buy them at about this kind of price.
I wouldn't pay too much attention to broker price targets and recommendations. Studies have shown that they are utterly meaningless and following them works out no better than tossing a coin. In fact, my recollection is that they don't even beat the coin!
The change of business model to SaaS is a clear worry and I remember a previous software holding having the same problem in transitioning from up-front license fees to recurring revenues. Let's face it, it's always better to get the full amount of revenue up-front no matter what you're selling! One of my other holdings (Sopheon) is going through the same transition. It's a good company but the change to SaaS has whacked the share price because it really hurts EPS in the short-term. It's the main reason I have less interest in Sage currently.
All the best, Si