Goldman Sachs reiterates Sell rating on Manpower stock despite Q2 beat

Published 17/07/2025, 14:36
Goldman Sachs reiterates Sell rating on Manpower stock despite Q2 beat

Investing.com - Goldman Sachs has maintained its Sell rating and $42.00 price target on Manpower Inc . (NYSE:MAN) following the company’s second-quarter 2025 earnings release that exceeded analyst expectations. According to InvestingPro data, the stock is currently trading below its Fair Value, with a P/E ratio of 18.46x and a dividend yield of 3.34%.

Manpower reported better-than-anticipated revenue and earnings per share for Q2 2025, with its third-quarter EPS guidance also coming in above consensus estimates at the midpoint. On a constant currency basis, the company’s overall revenue declined 3.5% year-over-year in the second quarter, an improvement from the first quarter’s 5% decline. The company has generated $17.54 billion in revenue over the last twelve months, maintaining its position as a prominent player in the Professional Services industry.

The staffing firm, which generates two-thirds of its revenue from Europe, experienced revenue declines in both the U.S. and European markets. These decreases were partially offset by stronger demand in Latin America and Asia Pacific regions, according to Goldman Sachs.

Manpower’s EBITA margins contracted by 50 basis points year-over-year to 2.0%, primarily due to negative operating leverage. The company partially mitigated this impact through selective cost-cutting measures and productivity initiatives, with management indicating further adjustments to its cost base in regions continuing to face weak temporary staffing demand.

Goldman Sachs expects investor focus to center on several key areas during Manpower’s earnings call, including staffing volume trends in Europe and the U.S., potential tariff impacts on staffing demand, large tech enterprise staffing trends, performance of the high-margin Experis and Talent Solutions businesses, and specific areas targeted for cost reductions. InvestingPro subscribers can access detailed analysis of Manpower’s financial health, including 8+ additional ProTips and a comprehensive Pro Research Report, providing deeper insights into the company’s valuation and growth prospects.

In other recent news, ManpowerGroup reported a second-quarter net loss, primarily due to an $89 million non-cash goodwill impairment charge. The company posted a net loss of $1.44 per share for the quarter ending June 30, 2025, in contrast to earnings of $1.24 per diluted share in the same period last year. Excluding the impairment charge, restructuring costs, and losses from business sales, adjusted earnings were $0.78 per share, surpassing analyst estimates of $0.68. Revenue remained flat at $4.52 billion compared to the previous year, exceeding analyst expectations of $4.35 billion. On a constant currency basis, revenue decreased by 3%, while organic constant currency revenue declined by 1%. The company’s Manpower and Talent Solutions brands returned to revenue growth, while Experis faced declines due to weak professional staffing demand. ManpowerGroup anticipates third-quarter earnings per share to be between $0.77 and $0.87, including an estimated favorable currency impact of 3 cents. The impairment charge was related to operations in Switzerland and the United Kingdom (TADAWUL:4280), with a gross profit margin of 16.9%, reflecting a slight decrease from the previous quarter.

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