On Friday, BMO Capital Markets adjusted its outlook on Manpower Inc. (NYSE:MAN) shares, a leading workforce solutions company. The firm's analyst has reduced the price target on Manpower shares to $71.00 from the previous $87.00. Despite the change in target, the analyst maintained a Market Perform rating on the stock.
The revision follows Manpower's latest earnings report, which met analyst expectations in most areas. The company's performance echoed the trends observed in other staffing and recruiting businesses focused on the Europe, Middle East, and Africa (EMEA) region, suggesting that the reported weakness did not come as a complete surprise to the market.
Manpower's revenue guidance for the fourth quarter of 2024 was in line with the midpoint of consensus estimates. However, the company projected weaker margins and earnings per share (EPS), which prompted the adjustment by BMO Capital.
The anticipated increase in corporate costs and a conservative stance regarding the holiday season and potential December plant closures were cited as factors influencing the revised guidance.
The analyst's commentary highlighted the rationale behind the lowered estimates and target price, stating, "We reduce our estimates and target price (to $71)." This reflects a recalibration of expectations in light of the company's guidance and current market conditions.
Investors and market watchers will be keeping a close eye on Manpower's performance in the coming quarter, as the company navigates the challenges outlined in its guidance and addressed by BMO Capital's revised price target.
In other recent news, Manpower Inc. reported a 2% decline in third-quarter revenue, reaching a total of $4.5 billion, while adjusted earnings per share fell by 8% year-over-year to $1.29. The company's Talent Solutions revenue, however, saw a rise of 7%, driven predominantly by a 9% revenue increase in Japan.
Goldman Sachs maintained its Sell rating on the company, while Jefferies and Truist Securities revised their outlooks, lowering their price targets. These revisions followed Manpower's fourth-quarter revenue and earnings per share guidance, which fell short of both firms' and consensus estimates, revealing noticeable weakness in Northern Europe.
Truist Securities further anticipates Manpower to experience approximately flat EBITDA growth in 2025, with a more robust growth of around 30% in EBITDA projected for 2026, despite potential financial challenges due to a higher tax rate in France.
InvestingPro Insights
To complement the analysis provided by BMO Capital Markets, InvestingPro data offers additional context on Manpower Inc.'s financial position. The company's market capitalization stands at $3.19 billion, with a price-to-earnings ratio of 18.09 over the last twelve months as of Q3 2024. This P/E ratio is significantly lower than the current 95.28, suggesting a potential undervaluation based on recent earnings.
Manpower's revenue for the last twelve months as of Q3 2024 was $18.08 billion, with a revenue growth of -5.28% over the same period. This aligns with the analyst's observations about weakness in the EMEA region and the company's conservative guidance.
InvestingPro Tips highlight that Manpower has maintained dividend payments for 31 consecutive years and has raised its dividend for 13 consecutive years. The current dividend yield is 4.59%, which may be attractive to income-focused investors despite the lowered price target. Additionally, the company is trading near its 52-week low, which could present a potential entry point for long-term investors who believe in the company's fundamentals.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Manpower Inc., providing a deeper dive into the company's financial health and market position.
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