European Staffing & Recruitment: Start of recovery, or short-term bounce?

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European Staffing & Recruitment: Start of recovery, or short-term bounce?

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European Staffing & Recruitment Equities

Europe including UKStart of recovery, or short-term bounce?

Industrial Services

Rory McKenzie

Shares rally +60% from historic trough, but we still see reasons for caution Analyst

Adecco, Randstad, Hays and PageGroup have just seen a sudden, significant rally: shares rory.mckenzie@ubs.com

are +60% on average over the past month (albeit still -5% YTD and -60% below 2022 +44-20-7568 1977

highs). The market 'momentum unwind' has clearly been positive for one of the most Abi Bell

short-crowded subsectors in Europe, but this also fairly reflects efforts companies made Analyst

to stabilise earnings after 4yrs of declines. However, for significant further upside we abi.bell@ubs.com

believe earnings would have to sustain positive momentum - and we remain cautious on +44-20-7568 1594

the timing and scale of any profit recovery, given limited evidence of broad-based hiring Nicole Manion

growth and ongoing structural debates around the 'future of work'. Updating our Analyst

forecasts and valuations in this note, we think that 2026e earnings appear solid and so a nicole.manion@ubs.com

higher target multiple is deserved, but still see up to -10-15% downside to consensus +44-20-7568 2094

forecasts for an accelerating recovery in 2027e+. We remain Sell-rated on Adecco (PT Abdihakem Ahmed

CHF20 from CHF13), Randstad (PT €26 from €18), and Neutral-rated on Hays Associate Analyst

(PT 60p from 33p) and PageGroup (PT 180p from 125p). abdihakem.ahmed@ubs.com

+44-20-7567 1050

Declines easing, but not clear that a broad-based recovery is ahead