On Friday, Baird adjusted its financial outlook on Robert Half International Inc. (NYSE:RHI), a staffing firm, reducing the price target to $79 from the previous $84. Despite this change, the firm retained its Outperform rating on the company's shares.
The revision follows Robert Half's first-quarter earnings report, which delivered mixed results. The company's guidance indicated a positive trend in revenue and a sequential improvement in its Protiviti business, which specializes in consulting and internal audit.
The slower pace of recovery in the talent solutions segment was a key factor in the price target adjustment. Small business confidence has remained low, and there has been a decrease in employee turnover after hours, which saw the company's stock drop by 4.9%.
Protiviti's performance, on the other hand, has been positive, benefiting from market share gains and a heightened demand for regulatory compliance services. This aspect of the business is showing signs of strength even as other areas lag.
Baird's decision to maintain the Outperform rating is based on the belief that the stock is nearing support levels and that its valuation remains attractive when considering the company's earnings potential.
The firm's analysts have recalibrated their estimates to align with the slower-than-expected recovery pace in Robert Half's talent solutions, which encompasses staffing and placement services for various professional fields.
InvestingPro Insights
Recent data from InvestingPro presents a nuanced picture of Robert Half International Inc. (NYSE:RHI). With a market capitalization of $7.17 billion and a Price/Earnings (P/E) ratio of 21.07, which adjusts slightly to 20.68 on a last twelve months basis as of Q1 2024, the company stands as a significant player in the staffing industry. Despite a revenue decline of 13.83% over the last twelve months as of Q1 2024, Robert Half boasts a robust gross profit margin of 39.79%, indicating efficient cost management relative to its revenue.
InvestingPro Tips highlight that Robert Half holds more cash than debt on its balance sheet and has raised its dividend for 20 consecutive years, signaling financial stability and a commitment to returning value to shareholders. Moreover, the company has maintained dividend payments for 21 consecutive years, with a notable dividend growth of 23.26% in the last twelve months as of Q1 2024, and a current dividend yield of 3.0%. These factors may appeal to income-focused investors, particularly in a volatile market environment.
For investors seeking further insights, there are additional tips available on InvestingPro, including an analysis of the company's stock price volatility and its trading activity near the 52-week low. Readers can explore these insights and more by visiting the InvestingPro platform and can enjoy an extra 10% off a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24. Remember, there are 7 more InvestingPro Tips that could help you make an informed decision on Robert Half International Inc.
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