Goldman Sachs has maintained its Sell rating on Manpower Inc. (NYSE: MAN), with a steady price target of $64.00.
The firm's analysis followed Manpower's third-quarter earnings report, which aligned with Goldman Sachs' predictions and general market consensus.
However, the company's forecast for the fourth quarter was significantly lower than what Wall Street anticipated.
Manpower's recent financial outcomes revealed ongoing revenue declines as employers exhibit caution in their recruitment activities. The company noted that staffing demand has somewhat stabilized in North America and Europe, albeit at reduced levels.
The most significant challenges were reported in Northern Europe, where logistics, transportation, and the public sector face notable headwinds. Expectations for the fourth quarter in this region are for a further downturn compared to the third quarter.
The company is also bracing for a decrease in EBITA margins during the fourth quarter, attributed to negative operating leverage. This is likely to be exacerbated by anticipated project delays and plant shutdowns in December, amidst a challenging macroeconomic environment.
In other recent news, Manpower Inc. experienced a marginal decline in third-quarter revenue, reporting a total of $4.5 billion, a 2% dip year-over-year. The company's adjusted earnings per share also fell by 8% year-over-year to $1.29.
However, it wasn't all negative for Manpower; the company saw its Talent Solutions revenue rise by 7%, with the Asia-Pacific, Middle East segment growing by 3%, predominantly driven by a 9% revenue increase in Japan.
In light of these developments, Jefferies and Truist Securities have both revised their outlook on Manpower. Jefferies lowered the company's price target from $70.00 to $65.00, while Truist Securities reduced theirs from $78 to $74, with both firms maintaining a Hold rating.
These changes follow Manpower's fourth-quarter revenue and earnings per share guidance, which fell short of both Jefferies' and consensus estimates, revealing noticeable weakness in Northern Europe.
Furthermore, 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. This outlook is influenced by potential financial challenges in 2024 and 2025 due to a higher tax rate in France that could impact Manpower. Despite these projections, Truist Securities continues to maintain its Hold rating on the stock.
InvestingPro Insights
Recent InvestingPro data provides additional context to Manpower Inc.'s (NYSE:MAN) current financial situation. The company's market capitalization stands at $3.19 billion, with a P/E ratio of 18.09 for the last twelve months as of Q3 2024. This valuation metric is significantly lower than the current P/E ratio of 95.28, suggesting potential volatility in earnings.
Manpower's revenue for the last twelve months as of Q3 2024 was $18.08 billion, with a revenue growth rate of -5.28% over the same period. This aligns with Goldman Sachs' observation of ongoing revenue declines and cautious employer recruitment activities.
Two relevant InvestingPro Tips highlight Manpower's financial resilience despite current challenges. Firstly, the company has maintained dividend payments for 31 consecutive years, demonstrating a commitment to shareholder returns even in difficult times. Secondly, Manpower is trading near its 52-week low, which could present an opportunity for investors who believe in the company's long-term prospects.
These insights complement Goldman Sachs' analysis, providing a broader picture of Manpower's financial health and market position. InvestingPro offers 11 additional tips for Manpower, providing further depth for investors seeking to understand the company's outlook in the current economic climate.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.