In a report released today, Remi Grenu from Morgan Stanley downgraded Hays plc to a Sell, with a price target of p55.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Remi Grenu has given his Sell rating due to a combination of factors impacting Hays plc. The staffing data from Germany and the UK, which contribute significantly to Hays’ net fees, has shown weakness, and the company’s comments on job flow deterioration suggest a negative short-term outlook. This could lead to a continued decline in net fees and a potential downside to consensus operating profit forecasts over the next two years, despite efforts to reduce costs.
Additionally, Hays is projected to generate limited free cash flow, which may not sustain its current shareholder return policy, leading to a possible dividend cut. The company’s exposure to white-collar and entry-level positions makes it more vulnerable to disruptions from AI-related job destruction, adding to the cyclical and structural challenges it faces. These factors contribute to a risk-reward profile that is seen as tilted to the downside, prompting the Sell rating.
According to TipRanks, Grenu is a 2-star analyst with an average return of 0.5% and a 49.50% success rate. Grenu covers the Industrials sector, focusing on stocks such as Adecco Group AG, PageGroup, and Hays plc.