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Deutsche Bank Lifts Price Target On Manpower (MAN) To $55, Reiterates 'Buy'

 April 23, 2012 02:58 PM

(By Balachander S) Deutsche Bank (DB) lifted its price target on shares of Manpower Inc. (NYSE:MAN) to $55 from $52 due to increased confidence in its forward estimates, while reiterating its "Buy" rating due to the undemanding valuation and strong operating results.

Surprisingly good results in Europe offset weakness in the US, the bank said. "Exactly opposite of how we expected it, but MAN's 1Q results beat none the less. We like the stock here and now as we think there is a good chance that going into 3Q organic rev trends can either stabilize or improve," DB wrote in a note.

The bank is of the view that MAN's focus on efficiency, RPO, and perm will continue to allow better operating leverage than historically seen. Key downside risks include incremental European economic weakness, increased pricing pressure due to slow growth, weaker-than-expected incremental margins, negative regulatory developments post elections in key markets, or a stronger US dollar, DB noted.

[Related -Manpower Group, Inc. (MAN): 53% Gain On Jobs And Emerging Markets]

DB said the YoY revenue declines in the first two weeks of April are similar to March for ManpowerGroup, as recent French and Dutch temp market data showed. "Intra-quarter, we think MAN will trade on European PMIs and other key European indicators. If investors get confident about European trends improving, we believe MAN will break out of its trading range," the bank wrote.

Milwaukee, Wisconsin-based Manpower provides workforce solutions and services worldwide. The company offers permanent, temporary, and contract recruitment services; assessment and selection services; training and development services; outsourcing services; and workforce consulting services.

[Related -A Soft End to the Week]

MAN shares retreated 2.80 percent to trade at $43.66. In the past 52 weeks, the stock has been trading between $31.81 and $68.00.



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