Shares in The Sage Group PLC (LSE:SGE) rose 1.5% to 1,099p on Monday after UBS upgraded the accounting software provider to 'buy', arguing that its growth outlook is attractively priced and that artificial intelligence should support – rather than disrupt – its business.
Analyst Michael Briest raised his price target slightly to 1,425p from 1,400p, implying around 33% upside. He sees revenue growth of more than 9% as “well underpinned”, with AI likely to enhance Sage’s pricing power from the 2026 financial year onwards.
UBS also highlighted Sage’s strong quality metrics, placing it in the top quintile across its quantitative screens.
The group, which is based in Newcastle and listed on the FTSE 100, provides accounting, payroll, and business management software to small and medium-sized enterprises (SMEs).
Its products help businesses automate tasks like invoicing, tax compliance, and HR processes. The group has been shifting to a subscription-based model, with most of its revenue now recurring.
The company has also been integrating AI features into its software to boost productivity for customers, a move that UBS believes could justify higher pricing over time.