Moving Towards the Bear Case - PT cut to CHF13.5

Research evidence excerpt

Moving Towards the Bear Case - PT cut to CHF13.5

Switzerland | Business & Employment Services

Adecco EquityMayResearch14, 2026

TARGET | ESTIMATE CHANGEMoving Towards the Bear Case - PT cut to

RATING UNDERPERFORMCHF13.5

PRICE CHF15.25^

Q1 results further evidenced the backward gross margin trajectory, notably

CHF13.50 (CHF16.00) |

resulting from the current top-line growth dynamic. This was until now PRICE TARGET | % TO PT -11%

partially offset by cost-cutting, although this quarter highlighted the limited 52W HIGH-LOW CHF27.26 - CHF17.30

headroom left and the need to re-invest to sustain the revenue trajectory, FLOAT (%) | ADV MM (USD) 96.8% | 17.06

incrementally weighing on operating leverage. We cut our PT to CHF13.5, MARKET CAP CHF2.6B | $3.3B

on estimates downgrades and multiples de-rating as structural challenges TICKER ADEN SW

materialize. ^Prior trading day's closing price unless otherwise

noted.

Positive top-line momentum driving gross margin dilution: the top-line performance remains

the positive development of the equity story, with the better-than-expected 5.3% Q1 organic FY (Dec) CHANGE TO JEFe JEF vs CONS

growth expected to be sustained into 2Q, despite tougher comps (2Q cons. +2.7%). Yet, GM 2026 2027 2026 2027

came-in below expectations again (-40bp y/y organically), including incrementally weaker temp REV +3% +4% -4% NA

margin (-30bp y/y 1Q26 vs. -20bp y/y 4Q25; flat y/y 3Q25). Top-line growth is still skewed to EPS -3% -6% -5% -17%

large clients, and management called out twice during the call the 'very competitive' backdrop

in this market segment. We note the company has been outperforming its main peer RAND 2026 (€) Q1 Q2 Q3 Q4 FY

over the past quarters, delivering on management's ambition to 'run faster than others' and EPS -- -- -- -- 2.36