RBC Capital cuts Hays price target
RBC Capital Markets cut its price target on Hays plc on Thursday to 65p from 75p following the recruiter's second-quarter trading update a day earlier.
The bank said it was taking a more cautious view of near-term market recovery for Hays, noting that only about 15% of its countries by net fees are currently growing.
"Following Hays' fiscal Q2 (calendar Q4) trading update and commentary from key peers, we take down estimates to reflect ongoing challenging conditions, particularly in key Northern European markets, and assume that meaningful cyclical recovery is pushed out to calendar 2027," it said.
"Though there is cautious optimism around German fiscal stimulus kicking in later this year, confidence in the UK and France (circa 25% of group fees combined) is increasingly undermined by political dysfunction, and the whole region continues to suffer from counterproductive net zero zealotry and excessive regulation, in our view."
The bank's earnings per share estimates for FY26, FY27 and FY28 fall by 9%, 30% and 33% respectively, with net fee cuts of 5% for FY26 and 12% for FY27 compounding the EBIT reductions as, it thinks, the company will seek to preserve capacity as best it can.
RBC maintained its 'outperform' rating on Hays. While it prefers key peer PageGroup on fundamentals, it said Hays remains too cheap to ignore.
At 1000 GMT, Hays shares were down 3.1% at 46.90p.
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