Redburn initiates Manpower Group with Buy, Robert Half with Neutral

The recruitment sector is inherently cyclical as demand is driven by businesses’ outlook, Redburn says in a research note as the firm initiates coverage of several names in the space. After a year of earnings downgrades, Redburn argues a shift in investor sentiment towards a 2024 recovery could see the shares re-rate ahead of earnings upgrades. The firm’s recommendations reflect those positioned to benefit first given end market exposure. Redburn initiates coverage of Hays’ (HAYPY) with a Buy rating as technical and temporary recruiting should perform better than its specialist peers; Adecco (AHEXY) with a Buy given the dual benefit of early-cycle blue-collar exposure and a turnaround is underway; Manpower (MAN) with a Buy as it believes it will also benefit from its blue-collar exposure and the valuation currently suggests opportunity; and Randstad (RANJY) with the Neutral as it should continue to execute well but sees this is reflected in its price. The firm sees greater risk to earnings estimates for specialists PageGroup (MPGPF) and Robert Half (RHI), for whom it is too early to turn positive. Reburn starts coverage of both with Neutral ratings.