On Thursday, Bernstein analysts adjusted their outlook on shares of Randstad NV (AS:RAND:NA) (OTC: RANJF), a prominent player in the global staffing industry, by reducing the price target from €42.00 to €37.00 while maintaining a Market Perform rating on the stock.
The revision comes in response to the ongoing decline in the temporary hiring market, particularly in the United States and key European countries such as France and the United Kingdom (TADAWUL:4280).
Bernstein's analysis indicates a downward revision in Randstad's organic growth projections for the years 2024 and 2025, with estimates reduced by approximately 0.5 percentage points and 3 percentage points, respectively. These adjustments are expected to decrease the company's gross profit by 1% for 2024 and by a more significant 7% for 2025. The culmination of these factors has led to the lowered price target.
The analysts' decision to maintain the Market Perform rating is based on their continued cautious stance on the industry. In their report, the analysts elaborated on the challenges faced by Randstad, pointing out that the deteriorating temporary hiring market is a key factor influencing their forecasts and subsequent target price adjustment.
In contrast to Randstad, Bernstein analysts have a different perspective on Adecco (SIX:ADEN), another major staffing firm. The analysts have sustained a Market Perform rating for Adecco, attributing their outlook to the company's relatively lower exposure to the U.S. market, which stands at 14% compared to Randstad's 21%. Moreover, Adecco's effective cost control measures have been recognized as a positive factor by the analysts.
In summary, Bernstein's analysis reflects a cautious approach to Randstad's stock amid a challenging temporary hiring market, leading to a reduction in the price target. While the firm maintains a neutral Market Perform rating, the revised figures suggest that the analysts are closely monitoring industry trends and company-specific developments that could impact Randstad's financial performance in the coming years.
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