Yahoo Finance Bear of the Day: ManpowerGroup (MAN)
ManpowerGroup MAN is still seeing a strong global job market but negative currency exchange is hitting its earnings. Analysts have cut earnings estimates on this Zacks Rank #5 (Strong Sell).
ManpowerGroup is a global workforce solutions company. It has 3 different brands: Manpower, Experis and Talent Solutions. It operates in 75 countries and territories.
A Beat in the Second Quarter
On July 19, 2022, ManpowerGroup reported its second quarter results and beat the Zacks Consensus by $0.02. Earnings were $2.33 versus the consensus of $2.31.
Revenues fell 4% to $5.1 billion but were up 6% in constant currency.
It saw continued strong performance of its higher margin brands, including Experis and Talent Solutions. Manpower saw some supply chain disruptions in certain European markets which hit performance in that brand.
ManpowerGroup Guides Under Consensus on Q3
The strong dollar is hitting. ManpowerGroup gave third quarter guidance below the Zacks Consensus, in the range of $2.19 to $2.27.
That includes an unfavorable currency impact of $0.29. The Zacks Consensus for Q3 had been looking for $2.28.
But ManpowerGroup isn't bearish on the upcoming quarter.
"As we start the third quarter, labor markets remain very solid and demand for talent is strong. We continue to monitor those sectors in Europe where present-day supply-chain disruptions are impacting our business, particularly in the automotive industry," said Jonas Prising, CEO.
"At the same time, we also believe the persistent level of talent shortage represents a significant opportunity for our business," he added.
As a result of the lower guide, analysts have lowered both Q3 and full year estimates.
The 2022 Zacks Consensus has fallen to $8.83 from $8.97 prior to the earnings release. But that's still earnings growth of 22% as ManpowerGroup made just $7.24 last year.
Image Source: Zacks Investment Research
Shares Sink in 2022
With fears of a recession climbing, it's not surprising that shares of ManpowerGroup have fallen 18.6% year-to-date.
Who wants to own a staffing company as the economy slows?
Shares are cheap, however, with a forward P/E of just 8.9. But it could be a value trap if earnings estimates are cut further.
Investors do get a dividend, yielding 3.4%, for their troubles.
But investors may want to wait on the sidelines and keep ManpowerGroup on a watch list until there is more certainty in the global economy.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ManpowerGroup Inc. (MAN) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
