Jefferies has adjusted its outlook on Manpower Inc. (NYSE: MAN), lowering the staffing company's price target from $70.00 to $65.00 while maintaining a Hold rating.
The revision follows Manpower's third-quarter 2024 revenue report, which slightly exceeded consensus estimates by approximately 1% and earnings per share that aligned with Wall Street's expectations.
Manpower's financial performance in the third quarter indicates a steady market environment, with no significant changes noted. The company's sales cycles have remained extended, and clients are exercising caution.
The fourth-quarter revenue and earnings per share guidance provided by Manpower fell short of both Jefferies' and consensus estimates, with notable weakness observed in Northern Europe.
The firm's analyst emphasized the current market conditions, stating, "The environment remains unchanged as sales cycles continue to be elongated and clients remain cautious." The analyst's commentary reflects a cautious stance on Manpower, suggesting a neutral position is appropriate given the current phase of the economic cycle.
In other recent news, Manpower reported a 2% year-over-year revenue decline, with total revenue reaching $4.5 billion. Adjusted earnings per share fell by 8% year-over-year to $1.29. On a brighter note, Manpower's Talent Solutions revenue increased by 7%, and growth was seen in the Asia-Pacific, Middle East segment by 3%, primarily driven by Japan's 9% revenue increase.
Truist Securities has revised its price target for Manpower, decreasing it to $74 from the previous target of $78, while maintaining a Hold rating. The firm's decision is influenced by Manpower's fourth-quarter revenue guidance, which aligns with market expectations, but is overshadowed by the anticipation of weaker demand in Northern Europe. Additionally, Truist Securities highlighted that the preliminary budget in France could introduce a higher tax rate in 2024 and 2025, presenting an additional financial challenge for Manpower.
The firm expects Manpower to experience approximately flat EBITDA growth in 2025, with a more robust growth of around 30% in EBITDA for the year 2026. Despite these projections, Truist Securities maintains its Hold rating on the stock.
InvestingPro Insights
Recent data from InvestingPro offers additional context to Manpower Inc.'s (NYSE:MAN) current market position. The company's market capitalization stands at $3.19 billion, with a P/E ratio of 18.09 based on the last twelve months as of Q3 2024. This valuation metric is significantly lower than the reported P/E of 95.28, suggesting potential value for investors when considering recent earnings.
InvestingPro Tips highlight Manpower's commitment to shareholder returns. The company has maintained dividend payments for 31 consecutive years and has raised its dividend for 13 consecutive years. This consistent dividend policy is reflected in the current dividend yield of 4.59%, which may be attractive to income-focused investors, especially given the recent price decline with the stock trading near its 52-week low.
While Jefferies has lowered its price target, it's worth noting that InvestingPro's Fair Value estimate for Manpower stands at $87.44, suggesting potential upside from the current price levels. This discrepancy between analyst targets and InvestingPro's valuation model could provide investors with an interesting point of consideration.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Manpower, providing a deeper dive into the company's financial health and market position.
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