On Monday, Goldman Sachs adjusted its outlook on Manpower Inc . (NYSE:MAN), reducing the price target to $52 from the previous $56, while maintaining a Sell rating on the company's shares. The stock, currently trading at $54.52 and near its 52-week low of $53.70, has seen significant pressure with a 25.8% decline over the past year.
According to InvestingPro data, eight analysts have recently revised their earnings expectations downward. The decision follows recent data indicating a decline in temporary staffing trends in France, which is a significant market for Manpower, accounting for approximately 25% of its total revenue.
The PRISME data highlighted an average year-over-year decrease of 8.5% in French temporary jobs during the fourth quarter of 2024, a drop that has deepened since the 7.7% fall observed in the third quarter of the same year. Goldman Sachs' analysis suggests that the PRISME data, when compared to Manpower's revenue growth in France since 2000, shows potential for further downside to the company's revenue estimates and guidance for the fourth quarter of 2024.
The firm's cautious stance extends beyond France to other regions in Europe, particularly Southern and Northern Europe, where there has been a continued contraction in manufacturing PMI trends. This is of particular concern for Manpower, which specializes in European industrial temporary staffing, and the contraction has been noted in key economies including France, Germany, Italy, and the UK as of December 2024. The company's revenue has declined 5.28% over the last twelve months, reflecting these challenging market conditions.
In light of these observations, Goldman Sachs has revised its medium-term revenue and EBITA margin estimates for Manpower downward. The updated 12-month price target reflects these adjustments and the ongoing concerns about the European staffing market's health, particularly in the industrial sector where Manpower is heavily involved.
Despite these challenges, InvestingPro analysis suggests the stock may be undervalued at current levels, with additional insights available in the comprehensive Pro Research Report, which covers this and 1,400+ other US equities.
In other recent news, ManpowerGroup (NYSE:MAN) announced the retirement of Richard Buchband, Senior Vice President, General Counsel, and Secretary, with effect from December 31, 2024. He will serve as a non-executive Senior Advisor for the company until February 28, 2025. The company has also appointed Ger Doyle as the new U.S. Country Manager, succeeding Kye Mitchell as Head of Experis U.S.
ManpowerGroup's recent earnings report showed a 2% decline in third-quarter revenue, totaling $4.5 billion, and an 8% decrease in adjusted earnings per share to $1.29. However, the company's Talent Solutions revenue saw a 7% rise, driven mainly by a 9% increase in revenue in Japan. The company also announced a semi-annual dividend of $1.54 per share.
Analysts' outlook on the company has varied. BMO Capital Markets reduced the price target on Manpower shares to $71.00, Goldman Sachs maintained a Sell rating with a steady price target of $64.00, Jefferies lowered the company's price target from $70.00 to $65.00, and Truist Securities revised its price target from $78 to $74. Truist Securities anticipates Manpower to experience approximately flat EBITDA growth in 2025, with a more robust growth of around 30% in EBITDA projected for 2026.
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