On Friday, JPMorgan (NYSE:JPM) adjusted its outlook on ManpowerGroup (NYSE:MAN) shares, a global staffing firm, reducing the price target to $75 from the previous $84, while maintaining a Neutral rating on the company's stock.
The revision follows ManpowerGroup's second-quarter earnings report, which revealed an adjusted earnings per share (EPS) of $1.30. This figure fell slightly below JPMorgan's estimate of $1.33 but surpassed the Bloomberg consensus estimate of $1.28.
ManpowerGroup's year-over-year (y/y) organic constant currency (o/cc) same-day basis (SDB) revenue declined by 4% in the second quarter of 2024, aligning with expectations and mirroring the previous quarter's performance.
In the U.S., the company saw a smaller-than-anticipated revenue decline of 1.7% y/y in the second quarter, attributed to an increase in healthcare IT projects within its Experis division, although this boost is not expected to recur.
Conversely, in France, revenue dropped by 6.2% y/y on a constant currency basis in the second quarter, a downturn that was slightly more severe than the company's guidance had anticipated.
For the third quarter of 2024, ManpowerGroup has forecasted that revenue in the U.S. will experience a marginally greater decline compared to the second quarter, while the decrease in France's revenue is expected to lessen due to more favorable year-over-year comparisons.
The company predicts that its overall third-quarter revenue will contract by 3% y/y on an organic constant currency same-day basis, targeting the midpoint of the guidance range.
During the earnings conference call, ManpowerGroup's management indicated that employer hiring confidence is maintaining stability, albeit at reduced levels. This trend comes as inflation shows signs of moderation and economic activity cools across Europe and North America. Staffing trends in these regions have largely leveled out, but the demand for permanent staffing in Europe was weaker than anticipated.
In other recent news, Manpower Inc . has seen several shifts in its financial landscape. The company reported a slight beat on adjusted earnings per share (EPS) in its recent earnings report, despite facing challenges in the European market. BMO Capital Markets adjusted its outlook on Manpower, raising the price target from $80.00 to $87.00 while maintaining a Market Perform rating.
In a parallel development, ManpowerGroup announced a decrease in Q1 2024 revenue, amounting to $4.4 billion, marking a 5% year-over-year decline. However, the company also increased its semi-annual dividend by 4.8 percent to $1.54 per share.
Argus maintained its Hold rating on ManpowerGroup stock, citing challenging economic conditions and a decrease in demand for staffing services. Nonetheless, the firm expressed a positive outlook on the company's long-term prospects.
Amid these recent developments, ManpowerGroup remains committed to its Diversification, Digitization, and Innovation strategy, continuing global expansion and focusing on productivity initiatives and cost-cutting efforts to navigate the current economic climate. These are the latest updates surrounding the company's financial performance.
InvestingPro Insights
In light of the recent earnings report and JPMorgan's adjusted outlook for ManpowerGroup, it's pertinent to consider the company's financial health and market performance through the lens of real-time data and InvestingPro Tips. ManpowerGroup's market capitalization stands at $3.5 billion, with a forward P/E ratio of 18.56, suggesting that investors are expecting earnings to improve. Despite a decrease in revenue growth in the last twelve months as of Q1 2024, the company has a robust dividend yield of 4.2%, reflecting its commitment to returning value to shareholders—a streak maintained for 31 consecutive years.
InvestingPro Tips highlight that ManpowerGroup is a prominent player in the Professional Services industry, with a net income expected to grow this year. Additionally, the company's management has been proactively buying back shares, signaling confidence in its future performance. Investors might find these aspects particularly relevant given the company's stable dividend growth and the expectation of profitability in the current fiscal year.
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