Remi Grenu, an analyst from Morgan Stanley, maintained the Sell rating on Adecco Group AG (ADEN – Research Report). The associated price target remains the same with CHF19.50.
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Remi Grenu has given his Sell rating due to a combination of factors affecting Adecco Group AG’s performance. One significant issue is the ongoing challenges faced by Akkodis, particularly in Germany, where restructuring efforts are underway. The company’s exposure to the automotive sector, which is experiencing project delays and cancellations, is negatively impacting volumes, utilization rates, and margins. Additionally, the restructuring in France is necessary due to declining volumes and market share losses, especially with major clients facing structural declines.
Furthermore, while there is some positive momentum in certain divisions, overall client behavior remains cautious, and the market is described as being in a ‘wait and see mode.’ The pricing environment is competitive, with slight increases in the spread between bill and pay rates, but this is offset by non-recurring costs and salary increases. These factors combined suggest that Adecco Group AG may continue to face headwinds, justifying the Sell rating.