LONDON (SHARECAST) - In spite of Michael Page’s profit warning on Monday morning, analysts still seem to have mixed opinions about the recruitment firm.
Chief Executive Steve Ingham said in a statement that the start of the second half has been challenging, as expected, due to tough year-on-year comparables and the ongoing backdrop of economic uncertainty.
However, with market confidence likely to remain “poor for the foreseeable future”, he said that full-year operating profit would be slightly below current expectations.
The shares, which had sunk to an intraday low of 343.8p early on, were trading just 0.6% lower at 362.9p by the afternoon.
Seymour Pierce reiterated its ‘sell’ call on the shares after downgrading its full-year earnings before interest and tax (EBIT) forecasts for 2012 and 2013 by around 12% each.
The broker said that the stock trades at 26.2 times prospective earnings which is “too high in our view given the continued challenging economic backdrop”. Its target price remains at 320p.
Investec recommends to keep ‘hold’ of the shares, saying that the combination of the current rating, downgrades and exposure to the sluggish European markets means Michael Page looks “fully valued”. Its target price remains at 360p.
Meanwhile, Jefferies decided to stay more positive and maintained a ‘buy’ rating for the stock though it did cut its target price slightly.
“We believe the medium-term growth opportunity is intact and, even with modest global economic growth, see upside to 460p [target price down from 475p previously] on mid-cycle assumptions.”