Should I Do It? Not Robert Half Time

I'm always intrigued by conflicting analyst calls, so it caught my eye Tuesday morning when Merrill Lynch upgraded and Ryan Beck downgraded Robert Half International(RHI Quote - Cramer on RHI - Stock Picks).

Shares of Robert Half International, one of the nation's leading staffing firms, have dropped 17% year to date and 30% since their May highs, closing Tuesday at $31.36. Even so, Robert Half remains valued at 19.8 times expected full-year earnings of $1.60 a share -- 470 basis points ahead of the benchmark S&P 500 and also 430 basis points higher than its peer group, according to Capital IQ.

With that in mind, I'm here to answer investors' questions: Should I do it? Is Robert Half worth adding to your portfolio at current levels?

Merrill Lynch analyst Michel Morin raised his rating from neutral to buy, citing valuation as a driver. According to the research note, he finds Robert Half is "the most cyclical stock in our coverage universe" and set a 12-month price target of $40 a share. The company primarily serves a wide range of professional industries, with its finance and accounting division delivering the best growth in the second quarter.

On the other hand, Ryan Beck analyst James Janesky lowered his rating on Robert Half from outperform to market perform. According to the research note, he believes that "recent employment survey results have continued to spark employment uncertainty going into the second half of 2006 accompanied by lower levels in both temporary and permanent employment."

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