Analyst Greg Parrish from Morgan Stanley maintained a Hold rating on Advantage Solutions (ADV – Research Report) and decreased the price target to $2.00 from $4.50.
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Greg Parrish has given his Hold rating due to a combination of factors impacting Advantage Solutions. The company faced significant challenges in the first quarter, with adjusted EBITDA declining by 18% year-over-year, missing expectations. This decline was driven by labor market pressures, macroeconomic challenges, and a decrease in consumer sentiment. These factors have led to a revision of the company’s revenue and EBITDA forecasts to a range of low single-digit declines to flat growth.
Despite these setbacks, there are signs of improvement, particularly in staffing and recruitment efforts. However, ongoing macroeconomic and competitive risks, along with a tight labor market, continue to pose challenges for Advantage Solutions. The lack of clear catalysts for growth in 2025, combined with the inability to offset rising labor costs, has led to a cautious outlook. Consequently, Greg Parrish has adjusted the price target downwards, reflecting these ongoing pressures, while maintaining a Hold rating as the company navigates these headwinds.