Deutsche Bank has maintained its 'buy' rating on PageGroup PLC (LSE:PAGE), the FTSE 250 recruitment company, while cutting its price target sharply from 400p to 300p, arguing the stock offers value despite a difficult trading environment.
The note followed full-year results showing net fees declined 7% year on year, with the pace of decline easing to 4.6% in the fourth quarter from 6.7% in the third, a trajectory the broker characterised as relatively resilient.
Group operating profit came in at £21 million for the year, down from £52 million in 2024, implying a conversion ratio of 2.7% against 6.2% the prior year, as the weak top line fed through sharply to earnings.
The company cut its dividend, reflecting the pressure on profitability.
Deutsche Bank's analyst Steve Woolf highlighted that fee rates remain close to record highs, suggesting employers continue to place a premium on finding the right candidates even as hiring activity remains subdued.
The principal headwind is job conversion, meaning candidates accepting and starting roles once offered, a problem tied to broader macroeconomic uncertainty.
Fee-earner productivity rose 0.3% year on year and remains well above pre-pandemic levels, assisted by technology investment, which the broker suggested could be further enhanced by artificial intelligence deployment.
The shares were up 2.5% in mid-afternoon trade at 155.7p.