On Wednesday, BMO Capital Markets adjusted its outlook on shares of TrueBlue (NYSE:TBI), a staffing services company, by reducing its price target from $13.00 to $12.00. Despite the lower target, the firm maintained its Outperform rating on the stock.
TrueBlue's recent financial results fell short of market expectations, with both revenues and profits coming in below the consensus. The company experienced a decline that was widespread, affecting various business segments and geographic regions. Additionally, the guidance provided for third-quarter 2024 revenue and adjusted EBITDA was also below the consensus, prompting BMO Capital to revise its estimates and price target downward.
In light of these results, BMO Capital acknowledged the stock's underperformance but expressed a continued belief in its potential to outperform its peers in the event of a sector rebound. The firm's stance remains that TrueBlue has the capacity to surpass other companies in its group, should the industry recover.
The revised price target of $12.00 reflects the challenges TrueBlue is facing but also indicates a potential for growth if conditions in the sector improve. Despite the setbacks in the recent quarter, BMO Capital's Outperform rating suggests confidence in the company's future performance relative to the industry.
In other recent news, TrueBlue has been the focus of multiple financial analyses following its recent earnings report. The staffing company's first quarter of 2024 earnings surpassed expectations, reporting an adjusted earnings per share of $0.03, compared to the consensus estimate of a -$0.37 loss.
Despite a 13% revenue decline, TrueBlue's cost management initiatives have resulted in improved profitability, particularly in the PeopleManagement and PeopleScout segments.
BMO Capital Markets and Baird have maintained their Outperform ratings on TrueBlue's stock, albeit with revised price targets of $13.00, reflecting the company's mixed operating environment and the prolonged turnaround in its recovery. Notably, TrueBlue's management has indicated growth potential in areas such as manufacturing, renewable energy, and transportation, despite broader market challenges.
These are recent developments, and investors are closely monitoring TrueBlue's strategies and financial performance. The company's second quarter of 2024 revenue guidance suggests a range of $400-425 million, indicating a stabilization trend. TrueBlue's recent divestiture of its Canadian operations is expected to refine its focus on core markets, further strengthening its position in the staffing sector.
InvestingPro Insights
TrueBlue's recent financial performance and BMO Capital Markets' subsequent price target adjustment have drawn attention to the company's market position. According to real-time data from InvestingPro, TrueBlue has a market cap of approximately $226.22 million and is trading at a low revenue valuation multiple with a price/book ratio of 0.69 as of the last twelve months ending Q2 2024. This low valuation multiple may suggest a potential undervaluation of the company's stock, aligning with BMO Capital's perspective on the stock's potential for growth.
InvestingPro Tips indicate that TrueBlue holds more cash than debt on its balance sheet and that net income is expected to grow this year, which offers some positive signals for investors considering the stock's potential recovery. However, it is worth noting that the stock has experienced significant volatility, with a 1-week price total return showing a steep decline of 32.22%. With these factors in mind, investors may find it prudent to consider both the risks and opportunities presented by TrueBlue's current financial standing.
For those looking for further insights, InvestingPro provides additional tips on TrueBlue, which can be found at https://www.investing.com/pro/TBI. These tips could offer a deeper understanding of the company's financial health and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.