Shares of Kelly Services Inc. rose yesterday as a Citi analyst upgrade and improved employment trend
Shares of Kelly Services Inc. rose yesterday as a Citi analyst upgrade and improved employment trends.
Citi analyst James Samford upgraded his rating on the company's stock to "Buy" from "Neutral," saying he sees strong opportunities ahead for the staffing company. That's on top of last weeks jobs report from the federal government, which showed that companies added far more U.S. jobs in January than expected and that the unemployment rate fell to its lowest level in three years.
Kelly Services, based in Troy, Mich., reported Thursday that its fourth-quarter profit rose to beat expectations. It cited increased demand in North America. However, investors sent the company's stock down in trading that day, given concerns that a tax benefit helped drive much of the improved profit. Kelly's operating earnings actually fell year over year.
The company has a number of opportunities to improve its core business, Samford said in a research note. The company has seen strong gains in Russia, Switzerland and Norway that could offset slowdowns in other parts of Europe. Kelly is also increasing its presence in emerging markets, which could prove to be a good long-term strategy. Based on these signs and the surprisingly strong temporary staffing data and stabilizing employment trends in Friday's report, Samford raised his earnings estimates. He also raised his price target on Kelly's stock to $19 from $17.
Shares of Kelly rose 88 cents, nearly 6 percent, to $15.89 in afternoon trading. Its shares have traded between $10.77 and $22.99 in the past 52 weeks.