Manpower stock target cut to $48 by BMO on trade policy concerns

Published 21/04/2025, 11:12
Manpower stock target cut to $48 by BMO on trade policy concerns

On Monday, BMO Capital Markets adjusted its outlook on Manpower Inc . (NYSE: MAN), reducing the staffing firm’s price target from $54.00 to $48.00, while maintaining a Market Perform rating on the stock. The stock, currently trading at $40.07, has experienced a significant decline of 22.53% over the past week, approaching its 52-week low of $39.87. According to InvestingPro analysis, the stock appears undervalued at current levels. The revision follows Manpower’s acknowledgment of a cautious hiring environment due to geopolitical and trade uncertainties, particularly noting a delayed French budget and shifts in U.S. trade policy that have prompted a "wait-and-see" approach among employers.

Manpower’s management reported that despite the cautious stance, many of their clients remain hopeful that the current trade disputes will be resolved, potentially revitalizing hiring activities. The company maintains a strong financial position, with a notable track record of 31 consecutive years of dividend payments and a current dividend yield of 7.69%. However, the company’s guidance for the near future remains conservative, not anticipating any significant change from the current trend. InvestingPro subscribers have access to 14 additional key insights about Manpower’s financial health and market position.

The first quarter of 2025 showed promise for Manpower, but the optimism was tempered by a higher tax rate and an unfavorable shift in the country mix where the company operates. These factors have led to an adjusted earnings per share (EPS) outcome and guidance that did not align with consensus expectations.

BMO’s analyst Jeffrey Silber cited these issues as key reasons for the adjustment in Manpower’s price target. Silber’s remarks included an observation that while the initial part of the first quarter was strong, the evolving economic landscape has necessitated a recalibration of estimates and expectations for the company.

Manpower’s stock price adjustment reflects the impact of the broader economic environment on the staffing industry, as companies navigate through periods of political and fiscal uncertainty. Trading at a P/E ratio of 17.22 and price-to-book ratio of 0.89, the stock presents interesting valuation metrics for value investors. The new price target set by BMO Capital Markets takes into account the current challenges faced by Manpower and the potential for changes in the geopolitical climate that could influence hiring trends in the future. For a comprehensive analysis of Manpower’s valuation and future prospects, investors can access the detailed Pro Research Report available on InvestingPro.

In other recent news, ManpowerGroup (NYSE:MAN) Inc. reported its Q1 2025 earnings, revealing a notable miss on earnings per share (EPS) compared to expectations. The company’s adjusted EPS was $0.44, falling short of the anticipated $0.55, despite revenue exceeding forecasts at $4.09 billion against the expected $3.98 billion. The earnings miss raised investor concerns, reflecting ongoing challenges in Europe and North America. ManpowerGroup anticipates continued market difficulties but remains focused on leveraging technology and AI for future growth. The company provided Q2 2025 EPS guidance of $0.65 to $0.75, expecting a constant currency revenue decrease of 3-7%. Analysts from firms like JPMorgan and Barclays (LON:BARC) have been closely monitoring the situation, noting the company’s cautious approach amidst economic pressures. The company is also investing in AI and technology to strengthen its competitive position.

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