2Q26: Perm skews risk to the downside

Research evidence excerpt

2Q26: Perm skews risk to the downside

M O R G A N S T A N L E Y R E S E A R C H2

QUARTERLY STAFFING CHARTBOOK

2Q CY26

Our order of preference heading into 2Q CY26 results

Upside/(downside)

Rating Bull Base Bear Comment

We moved our relative preference to Randstad in June as we think there is less downside risk relative to peer Adecco. We

remain cautious on the subsector, with Q2 data showing only pockets of improvement, but think Randstad offers the better

Randstad EW 70% -10% -58% relative risk/reward among the generalists. Benelux and Germany have improved, while the US and France look stable but at a

low base. We prefer Randstad vs. Adecco given lower leverage, lower risk of shareholder dilution and less demanding consensus

expectations. The stock trades on 8.5x NTM EV/EBITA, a premium to Adecco which we think is justified by the lower leverage.

We prefer Hays vs. Page Group into Q2 results. UK temp has held up better than perm, Germany is looking more stable and

Hays has meaningfully higher exposure to temp/contracting activity than Page, which we see as less exposed to another volume

Hays EW 112% -2% -41% slowdown. We still see risk to FY27/28 consensus, but the stock has de-rated and now trades on c9x NTM EV/EBITA, closer to

historical average levels.

Despite Adecco’s better recent organic growth momentum we downgraded the stock to Underweight with a preference for

Randstad. Staffing data in generalist/temp markets have stabilised, but France remains only stable at low levels and we see

Adecco UW 124% -9% -58% greater downside risk to expectations at Adecco relative to Randstad given their France exposure, elevated leverage, gross

margin pressure and potential dilution from another scrip dividend. The stock is optically cheap on c7x NTM EV/EBITA, but we