NEW YORK (AP) — The next few years could be tough for staffing companies that profit from new hiring, but a few firms may prosper amid the tepid economic recovery, according to a report Monday from Citi Investment Research & Analysis.
Citi analyst James Samford said in a note to clients that he is initiating coverage on two staffing companies, while downgrading his rating on a third. There is potential for these companies to profit even with historically weak job growth, Samford said.
Samford dropped his share price targets on three of the nation's biggest staffing companies, for simple reasons. The companies make money by finding employees for their clients, often to fill temporary jobs. With the job market stubbornly weak, there are fewer opportunities for those companies to place the legions of Americans seeking jobs so there are fewer chances for placement companies to earn money.
Recommended For You
In spite of the continuing economic doldrums, some companies will be able to capitalize on whatever hiring occurs, Stamford said.
He gave Manpower Inc. a "buy" rating but dropped his target price for the company's stock to $48 from $79. That's lower than previous forecasts but still at a premium above Manpower's closing price Friday of $38.23 per share.
Stamford was less optimistic about Robert Half International Inc., rating the company's shares a "hold" and dropping his price target for them to $25 from to $40. He said Robert Half shares could rise in a recovery, but the company is at risk in the event of prolonged economic weakness because of its high margin expectations.
"Risk of recession has even greater downside implications," he wrote of Half.
Stamford also rated Kelly Services Inc. shares a "hold" and lowered his target price for them to $16 from $18. He said Kelly has rebounded from the steep job market downturn of 2009, but its investments in international growth, its tax rates and its low incremental margins remain big challenges.
Shares of Manpower rose $1.16, or 3 percent, to $39.39 in afternoon trading while Robert Half International rose 67 cents, or 3 percent, to $23.31. Kelly Services rose 91 cents, or 6.3 percent, to $15.35.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
