Manpower Upgraded - Analyst Blog
16 Giugno 2011 - 3:45PM
Zacks
We recently upgraded our
recommendation on ManpowerGroup (MAN) to
Outperform with a price target of $61.00. Moreover, the company
also holds a Zacks #1 Rank, which translates into a short-term
‘Strong Buy’ rating and correlates with our long-term outlook.
Earlier, we had a Neutral stance on the stock.
Manpower’s comprehensive range of
services makes it a true global staffing firm. The company provides
services for the entire employment and business cycle including
permanent, temporary and contract recruitment, employee assessment
and selection, training, outplacement, outsourcing and
consulting.
The company’s brand value and
strong global network provides it a competitive advantage and
reinforces its dominance in the market. Manpower leverages a strong
network of about 3,900 offices, spanning across 80 countries and
serving approximately 400,000 clients. It benefits from growth
prospects in under-penetrated staffing markets.
Earlier, Manpower posted
better-than-expected first-quarter 2011 results that topped the
Zacks expectations on the heels of revenue growth across all
geographical regions and several European and emerging markets
portraying robust trends. Better expense control also lent support
to the bottom line. Moreover, Manpower witnessed a surge in
permanent recruitment business.
The quarterly earnings of 43 cents
a share outpaced the Zacks Consensus Estimate of 32 cents and rose
substantially from 4 cents earned in the prior-year quarter.
Foreign currency fluctuation favorably impacted net earnings by 3
cents a share. Net earnings also surpassed management’s guidance
range of 26 cents to 34 cents a share.
Milwaukee, Wisconsin based Manpower
said that its total revenue for the quarter soared 23.7% to
$5,072.4 million from the prior-year quarter, and 21.8% in constant
currency. The quarterly revenue also came well ahead of the Zacks
Consensus Estimate of $4,894 million.
Manpower expects second-quarter
2011 earnings in the range of 74 cents to 82 cents a share,
including a favorable impact of 8 cents from foreign currency
translation. The company projected total revenue growth of 10% to
12% in constant currency for the quarter.
Manpower, which competes with
Kelly Services Inc. (KELYA), is on an acquisition
spree in China. In a recent development, the company announced the
acquisition of a majority stake in REACH HR, a leading human
capital contributor in the manufacturing sector with 100,000
associates in Guangdong Province. Manpower also acquired Xi'an
Fesco, a leading human resources provider with 10,000 associates in
Shaanxi Province.
Further, Manpower also entered into
a partnership with the City of Kaifeng in Henan Province, gaining
access to millions of workforce in North Central China. The move
not only strengthened Manpower's position in China but also places
it among the country's largest providers of pioneering staff
solutions, starting from administrative or managerial hunt and
recruitment process outsourcing to outsized recruitments and
short-term staffing.
Given the strong fundamentals of
Manpower, we believe that the stock will outperform the broader
market in the long run.
KELLY SVCS A (KELYA): Free Stock Analysis Report
MANPOWER INC WI (MAN): Free Stock Analysis Report
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