CFRA has adjusted its price target for Adecco Group AG (ADEN: SW) (OTC: OTC:AHEXY), reducing it to CHF 30.00 from the previous CHF 35.00, while keeping a Hold rating on the stock in view of the company's first-half 2024 financial performance and market conditions.
Adecco (SIX:ADEN)'s reported revenue for the first half of 2024 showed a 3% year-over-year decline, totaling EUR 11.6 billion, which aligned with consensus estimates. The result was primarily due to significant market challenges in France, with a 7% revenue fall, and Northern Europe, where revenue decreased by 9%.
However, these downturns were partially offset by a 14% revenue increase in the Asia-Pacific region and a 10% rise in Southern Europe and EEMENA.
The company's earnings before interest, taxes, and amortization (EBITA) also experienced a downturn, dropping 12% to EUR 278 million. Despite this, Adecco anticipates an improvement in its gross margin in the third quarter of 2024, a projection that is consistent with typical seasonal patterns and considered achievable due to the company's disciplined approach to cost management.
Adecco has cautioned that it expects the trend of declining revenue to continue into the third quarter of 2024. The company's analysis suggests that a general hesitancy to hire could sustain the weakness in revenue growth in the short term.
Nevertheless, CFRA believes that Adecco's stronger margin performance and a slower fall in revenue compared to its competitors may provide some support for the stock price in the near future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.