Saga: analyst’s view on recovery chances
Covid has caused havoc for the over-50s company. Our chartist searches for a catalyst.
24th September 2020 09:35
Covid has caused havoc for the over-50s company. Our chartist searches for a catalyst.
Saga Plc (LSE:SAGA)
It's been nearly a year since we produced some truly depressing numbers for Saga (LSE:SAGA) future share price.
The intervening period has seen the share live down to expectations, hitting and breaking our drop target of 14p. While this number represented an ‘ultimate’ bottom, the period since the March Covid-19 drop has produced some further potentials.
Unfortunately, none of these potentials are particularly encouraging!
The immediate situation is fairly grim, suggesting ongoing weakness below 11p risks reversal to an initial 5.5p. There's a pretty good argument to hope for some sort of bounce, should such a level make an appearance.
With closure below 5.5p, our ‘ultimate bottom’ now works out at 0.25p.
Whatever rot established itself for the share price goes beyond the pandemic.
However, there can be little doubt Saga's target market will doubtless be avoiding congregating with flights and cruises, due to them also being the target market for Covid-19.
Since the start of September something funny has been going on with Saga's share price as it has enjoyed a pretty well-managed decline.
Presently, the share needs to trade above 20p to give hope for a miracle recovery, calculating with the potential of moves to an initial 30p with secondary, if exceeded, a longer-term 43p.
We're not hopeful.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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