Jefferies sees tough backdrop for staffing; downgrades Adecco but ups Randstad

Randstad NV

28/01/2025 08:07

** Jefferies says most indicators still point to a tough
backdrop for European staffing companies
    ** The brokerage estimates staffers will again report
earnings decline in H1, coupled with another round of downward
revisions to estimates
    ** Trends should sequentially improve into H2 due to easier
comparison figures, although some underlying improvement would
likely be needed to drive a more pronounced rebound, it says
    ** It raises Randstad  RAND.AS  to "buy" from "hold", saying
the world's biggest staffing firm offers the most attractive
earnings profile from a combination of easy comparatives and
more attractive mix driving a return to y/y growth
    ** It downgrades Adecco  ADEN.S  to "underperform" from
"hold", saying the balance sheet is a key concern and seeing a
two-year full dividend cut as the most rational action to solve
the leverage issue
    ** Shares in Adecco fall 1.2%; Randstad rises 1.2%
    ** Jefferies says Hays  HAYS.L  ("buy") should benefit from
its relatively higher temp exposure, with further upside
potential from increasingly resilient profile and self-help
    ** It sees limited share price upside on Page  PAGE.L 
("hold") given its perm exposure and earnings risks

 (Reporting by Michal Aleksandrowicz)
 ((michal.aleksandrowicz@tr.com))