On Tuesday, Deutsche Bank adjusted its price target for Robert Walters PLC (RWA:LN), a specialist professional recruitment group, reducing it to GBP5.50 from GBP6.00, while still endorsing the stock with a Buy rating.
The revision follows the company's report of a 12% year-on-year decline in net fees for the second quarter on a like-for-like basis. This drop is a slight improvement compared to the 16% decrease witnessed in the first quarter and a 10% decline in the fourth quarter of 2023.
The recruitment firm experienced its most significant challenges in the UK and Europe, with net fees falling by 18% and 13% respectively. The analyst attributed these declines to the compounded effects of political uncertainty and a weak macroeconomic environment. Despite these regional downturns, there were positive signs in Asia, where Robert Walters sees approximately 40% of its fiscal year 2023 fees and about 75% of its operating profit.
In Asia, the performance was notably better, with Japan and China reporting increases in net fees of 7% and 5%, respectively. These gains provided a silver lining against the backdrop of broader regional difficulties. However, Australia and New Zealand continued to pose significant challenges, with net fees in these markets dropping by 19%.
The company's mixed regional performance reflects a complex global recruitment landscape, where certain areas show resilience and growth potential while others are hindered by broader economic and political issues. Robert Walters' ability to maintain a Buy rating despite lowering the price target suggests a degree of confidence in the firm's underlying business and its prospects in less affected markets.
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