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US Analyst sees staffing markets stabilizing

US Analyst sees staffing markets stabilizing

Shares of Manpower Inc. have fallen as Citi Investment Research Analyst Ashwin Shirvaikar downgraded the staffing company, saying its growth prospects are unclear. Shirvaikar downgraded the Milwaukee based company to "Hold" from "Buy" and raised his price target to $61 from $50.

He commented, "Stabilization across its markets seems to continue, but visibility toward eventual growth remains very limited," he said in a client note late Wednesday. "We believe some time on the sidelines may allow for the earnings to catch up to the stock and/or provide greater certainty and clarity toward the eventual recovery."

Manpowers shares have risen about 140% since its low point March 9.

However, Shirvaikar upgraded Kelly Services Inc. to "Hold" from "Sell," saying he is more confident that the Troy, Mich., staffing company is seeking additional cost reductions. "Previously, we were concerned about Kelly's large losses and the unclear stance on further cost actions," Shirvaikar said. "We now see a clearer path to profitability and have adjusted our estimates accordingly." He added.

Shirvaikar raised his price target for Robert Half International Inc to $28 from $24. He maintained his "Hold" rating. The Menlo Park, Calif., company "should enjoy very strong incremental margins coming out of a recovery," he said.

Based on discussions with industry representatives, Shirvaikar said stabilization in the staffing sector is continuing.
"However, nobody was willing to equate the lower declines into expected growth," he said. "Companies are remaining hesitant about any hiring plans and will likely lean on existing staff before going out and hiring" temporary or permanent staff.

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