UBS has nudged up its price target for Hays plc (LON:HAS) after the recruitment giant issued a reassuring half-year update.
Underlying earnings (EBITA) of £100mln were in line with UBS’s forecasts and 1% ahead of the consensus forecast, as diversification and UK cost control limited margin erosion to just one-fifth of a percentage point (or 20 basis points).
Trading in 2017 has been solid so far, with renewed confidence in Germany and things looking up in the UK, which was “the confirmation we were looking for”, UBS said.
“Germany's temp business had a 'stall' in December, but this now looks to be just due to holiday timing,” UBS opined.
“The UK private sector continues to slightly improve and should more than offset a deteriorating public sector,” UBS believes.
The Swiss bank has increased its net fee forecasts by one 1-2% and its EBITA forecasts by around 5%, pretty much putting it in line with consensus estimates.
The price target rises to 160p from 155p but with the share price at 149p the rating remains ‘neutral’.
Neutral seems the default position of the broking community, with 12 analysts sitting on the fence; four rate it as a ‘strong buy’; one as a ‘sell’ and two as a ‘strong sell’.