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Investing.com - Truist Securities has reiterated a Buy rating with a $75.00 price target on ASGN Inc. (NYSE:ASGN), despite lowering estimates for the company. The target represents significant upside potential from the current price of $49.15, which is hovering near its 52-week low of $46.63. According to InvestingPro analysis, ASGN appears undervalued based on its Fair Value metrics.
The research firm cited weak demand at ASGN’s Creative Circle unit and the company’s internal emphasis on commercial consulting over assignment work as reasons for the estimate reduction.
Truist Securities noted that ASGN is actively pushing more consulting services, potentially at the expense of its traditional assignment business, as part of a strategy to drive a mix-shift toward higher-margin consulting services.
The firm’s quarterly private company poll, called Safari Snapshots, revealed that multiple private IT staffing competitors have observed seasoned customer-facing talent from ASGN’s Apex business becoming available in the labor market.
Truist Securities suggested that some successful producers in ASGN’s assignment work may be leaving rather than adapting to sell consulting engagements, which could create a drag on performance in the near term.
In other recent news, ASGN Inc. reported its Q1 2025 earnings, which revealed a slight miss on earnings per share (EPS) estimates but exceeded revenue expectations. The company posted an EPS of $0.92, falling short of the projected $0.95, while revenue reached $968.3 million, surpassing the anticipated $961.34 million. In analyst updates, Jefferies downgraded ASGN from Hold to Underperform, citing concerns about the near-term demand for staffing and IT services. Jefferies also reduced its price target for the company to $42.00 from $53.00. Similarly, Canaccord Genuity downgraded ASGN from Buy to Hold and slashed its price target to $55.00 from $115.00, expressing concerns over the company’s staffing revenue. Despite these challenges, ASGN has seen growth in its consulting revenue, now accounting for 61% of its total revenue, up from 57% a year ago. However, the Assignment revenue, which includes staffing services, has not shown the expected recovery, traditionally serving as an early indicator of a rebound in IT spending. These developments indicate a mixed outlook for ASGN amid current economic conditions.
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