Analyst Kevin Steinke from Barrington maintained a Buy rating on Kelly Services and keeping the price target at $25.00.
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Kevin Steinke has given his Buy rating due to a combination of factors that highlight Kelly Services’ strategic transformation and growth potential. The company has shifted its focus towards higher-margin and faster-growing services, moving away from its legacy as a global staffing generalist. This strategic shift has resulted in traditional temporary staffing contributing less than half of the company’s total revenue, with a significant portion now coming from more profitable segments like Science, Engineering & Technology (SET).
Additionally, Kelly Services has made substantial acquisitions in the IT staffing space, positioning itself as a top provider in the U.S. market. Despite current market challenges, there is optimism about the long-term growth prospects of the IT business. Furthermore, Kelly’s outcome-based solutions and talent solutions businesses are generating higher-margin revenues, and the Education segment presents a substantial growth opportunity with its leading market share in substitute teacher staffing. These strategic initiatives and growth opportunities underpin Steinke’s positive outlook on Kelly Services’ stock.