Berenberg has opened coverage of British leisure group Saga plc with a buy recommendation and a target price of 1,025 pence, the bank said on Tuesday. The broker's target implies roughly 62% upside from Saga's closing price of 589 pence on July 8, and is supported by a mix of valuation techniques, including discounted cash flow, peer multiples, and a sum-of-the-parts analysis.
The broker noted valuation multiples of 9.2 times EV/EBITDA and 15 times P/E on the closing price referenced in its initiation. Analysts Jack Cummings and Luka Trnovsek set out the view that Saga has moved from a "complex, over-levered business" to one that is now "predominantly travel-focused" and features a "capital-light insurance offering." The pair added that the share price has risen 240% over the last year as the market has begun to recognise the company's turnaround and said they believe there is further upside to be captured.
A central element in Berenberg's thesis is Saga's 2024 agreement to enter a 20-year affinity partnership with insurer Ageas. Under that arrangement, Saga sold its in-house underwriting business, Acromas Insurance Company Limited, for total consideration of
The Ageas transaction completed on July 1, 2025 and converts Saga into a standalone insurance broker, with underwriting risk removed from the group's profit and loss account. Berenberg describes the resulting insurance earnings stream as "highly visible, resilient" and a driver of positive cash flow generation.
Saga's Ocean Cruise division - operating two boutique ships, Spirit of Discovery and Spirit of Adventure, each with capacity just under 1,000 guests - was a major contributor to group earnings. For the fiscal year ending January 2026, the cruise operation produced
Load factors for the cruise business were reported at approximately 93%, and per diems were around 13% higher year-on-year as of the latest April update referenced by Berenberg. On those trends the bank forecasts 9% revenue growth and 24% profit-before-tax growth for fiscal 2027.
On group financials, Saga reported revenues of
Net debt was
Berenberg stated that management should prioritise debt repayment, with subsequent decisions balancing shareholder returns and investment into asset-light operations. The bank's valuation approaches converged on a per-share value of approximately 1,025 pence, which underpins its buy recommendation.