Adecco: Credit Suisse downgrades to sell
(CercleFinance.com) - As part of a sector report on the temporary employment sector, Credit Suisse has downgraded its rating on the Swiss share Adecco (from "neutral" to the "underperform") and the Dutch share Randstad (from buy, or "outperform," to neutral).
The broker has reduced its respective target prices from 50 Swiss francs to 40 Swiss francs, and from 50 euros to 41 euros.
"We expect market data to deteriorate further in the coming months putting further pressure on organic growth" of sector players, the broker's report says, with economic conditions deteriorating. In addition, the recent protests are expected to weigh on industrial activity in France, which represents a major market for Adecco.
However, analysts say that the Adecco and Randstad share prices only partially reflect this scenario. Credit Suisse believes that Adecco's organic growth will become negative in Q4. However, the broker is less negative in its appreciation of Randstad, due to a more balanced geographic exposure and robust cash generation. However, in both cases, it has trimmed the companies' earnings estimates, and likewise target prices.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The broker has reduced its respective target prices from 50 Swiss francs to 40 Swiss francs, and from 50 euros to 41 euros.
"We expect market data to deteriorate further in the coming months putting further pressure on organic growth" of sector players, the broker's report says, with economic conditions deteriorating. In addition, the recent protests are expected to weigh on industrial activity in France, which represents a major market for Adecco.
However, analysts say that the Adecco and Randstad share prices only partially reflect this scenario. Credit Suisse believes that Adecco's organic growth will become negative in Q4. However, the broker is less negative in its appreciation of Randstad, due to a more balanced geographic exposure and robust cash generation. However, in both cases, it has trimmed the companies' earnings estimates, and likewise target prices.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.