Hays: Deteriorating Net Fees, Weak Exit Rates, and Limited Recovery Visibility Justify Ongoing Sell Rating

Remi Grenu, an analyst from Morgan Stanley, maintained the Sell rating on Hays plc. The associated price target is p50.00.

Remi Grenu has given his Sell rating due to a combination of factors related to weakening operational trends and limited visibility on recovery. He highlights that Hays reported a 10% like‑for‑like decline in net fees in 2Q26, which not only missed company‑compiled expectations but also marked a deterioration versus the previous quarter, particularly in permanent placements and in the German market where reduced average hours worked weighed heavily on results. Other regions such as the UK, Rest of World, and parts of EMEA also showed broad-based fee declines, with only modest resilience in certain enterprise and ANZ segments, indicating that weakness is not confined to a single geography or business line.

Remi also underscores that the company has refrained from providing full-year FY26 guidance, citing ongoing uncertainty and the critical importance of the upcoming New Year trading period, which in his view adds to earnings risk and lowers confidence in near-term forecasts. While Hays is progressing with its cost-saving program and has started to realize annualized savings, these measures are seen as necessary to protect margins rather than as drivers of growth, and productivity gains are largely a function of reduced headcount. Cash generation in the quarter was slightly weaker than his own expectations, even though it matched management’s outlook, reinforcing his cautious stance. Together, the deteriorating growth profile, unchanged weak exit rate, and lack of clear catalysts for a near-term turnaround underpin his decision to maintain a Sell recommendation on the shares.

In another report released on January 7, Jefferies also downgraded the stock to a Sell with a p44.00 price target.

Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is neutral on the stock.