Saga share price: what’s the latest ahead of its Q3 results?
The insurance and travel company for over 50s has seen its share price fall by more than 40% this year, with analysts remaining conservative about its price trajectory ahead of its third quarter earnings.
Following a disappointing set of annual results last year that saw its dividend cut and its share price tumble more than 40%, Saga continues to struggle ahead of its third-quarter (Q3) results this month.
Over its first six months of trading underlying pre-tax profit hit £52.8 million, down 50.9% compared with the same period last year, though it remains in line with its full-year (FY) expectations.
In fact, the over 50s travel and insurance group remains on track to reach its target of underlying pre-tax profit of between £105 million and £120 million.
‘We have made good progress against our strategic reset,’ Saga Group chief executive officer (CEO) Lance Batchelor said. ‘The sales of our three-year fixed price insurance are encouraging, and a higher proportion of customers are coming to us direct.’
‘We are pursuing a number of initiatives to further improve the performance of our insurance business. Our membership programme is starting to prove effective in helping us develop a deeper relationship with, and sell multiple products to, our members,’ he added.
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Analysts conservative about Saga’s share price trajectory
Five analysts covering the stock offered a median 12-month price target of 60p a share, with a high estimate of 110p and a low forecast of 39p.
As of 12:00 GMT on Tuesday, Saga is trading at 57p a share, meaning that the median estimate represents a 5.2% increase from its current level.
However, based on the low and high estimates, the stock could fall by as much 31% or rally by as much as 92% over the next 12 months.
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Saga overhauls insurance
Just six months into its turnaround strategy, Saga has made good progress, fundamentally changing the way it does business in an increasingly commoditised travel and insurance market that saw the company record a £135 million loss last year.
This financial year, the group has seen a positive response from consumers to its new product offerings, with over 175,000 three-year fixed price policies being sold since launch.
Saga’s direct-to-consumer insurance strategy is yielding a share of new business of 53%, with over half of those customers opting for the three-year fixed price product, the company said
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