Street Calls of the Week
Investing.com - Jefferies downgraded ASGN Inc. (NYSE:ASGN) from Hold to Underperform on Monday, while reducing its price target to $42.00 from $53.00. The stock, which has declined nearly 39% over the past six months, currently trades at $52.84, significantly below its 52-week high of $105.67.
The downgrade reflects Jefferies’ view that near-term demand for staffing and IT services is unlikely to improve significantly in the current environment.
Jefferies identified specific risks to ASGN’s federal government consulting revenues from DOGE, along with persistent headwinds to its staffing business as companies prioritize internal productivity improvements using new AI tools and technologies.
The research firm’s adjusted EPS estimates for 2025 and 2026 are 3.5% and 10% below consensus, respectively.
Jefferies’ new price target reflects a below-peer-group 10x P/E multiple applied to its 2026 adjusted EPS estimate of $4.62, citing the company’s anticipated struggle to generate positive growth over the next year.
In other recent news, ASGN Inc. reported its Q1 2025 earnings, showing a slight miss on earnings per share (EPS) estimates, while revenue exceeded expectations. The company reported an EPS of $0.92, falling short of the projected $0.95, but revenue came in at $968.3 million, surpassing the expected $961.34 million. Despite this revenue beat, the company’s stock saw a downgrade from Canaccord Genuity, which adjusted its rating from Buy to Hold and cut the price target from $115.00 to $55.00, citing concerns over the company’s staffing revenue. The analyst firm noted that while ASGN’s consulting revenue has grown, representing 61% of total revenue, the staffing segment has not shown signs of recovery, which could delay a rebound in IT spending. Additionally, ASGN recently completed the acquisition of TopBlock, a Workday (NASDAQ:WDAY) services partner, which is expected to contribute positively to its consulting business. The company remains focused on strategic areas such as AI, cybersecurity, and digital engineering to drive future growth. Despite these developments, ASGN faces ongoing challenges in the IT services sector, marked by cautious client spending and macroeconomic uncertainties.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.