PageGroup PLC (LSE:PAGE) is facing continued pressure as permanent hiring volumes remain at low levels, according to UBS, which has downgraded its rating on the recruitment firm.
Permanent hiring has broadly declined for 2.5 years and the Swiss bank's analysts expect the weakness to persist due to rising macroeconomic uncertainty, cost pressures, and technological change.
"We're still deep in the longest downturn hiring markets have seen," UBS said, with circa 30 months of deteriorating markets already behind the sector capped by a profit warning from peer Hays last week.
The analysts have slashed forecasts for Page's underlying profits (EBITDA) by 40-65% for the current year out to 2027, with dividend forecasts also reduced.
UBS cut its rating to 'neutral' from 'buy' and cut its price target from 400p to 250p.
Although some market stability was seen in March and April, UBS now expects fresh economic uncertainties and cost pressures to weaken hiring intentions further. Gross profit is forecast to decline in double digits year-on-year over the second and third quarters of 2025.
Management’s ongoing cost-cutting efforts have reduced EBIT to around £23 million for 2025, with a modest rebound to £51 million expected in 2026, still well below the £196 million peak in 2022.
While acknowledging that Page retains a strong net cash position and remains cash generative, UBS models a 33% dividend cut from last year.