A handful of staffing companies, often held to be a bellwether for the economy at large, are poised to rebound, an analyst argued Monday.
Deutsche Bank raised
to buy from hold, saying they're cheap based on the brokerage's economic outlook.
"Our upgrade is based on the early signs of an economic recovery, which are most evident in Institute of Supply Management data showing service sector growth, as well as improving trends in the manufacturing sector," Deutsche wrote.
It raised its price target on Manpower to $42, compared with its Friday close of $35.96; it raised its target on Recourses Connection to $28, compared with a close of $20.38; and it raised its target on Robert Half to $24, compared with a close of $17.96.
While demand for labor is harder to predict, Deutsche said, it's likely a bottom has occurred.
"Labor market data are less conclusive, but we believe the worst is over," it wrote. "We expect cyclical factors to cause staffing demand to begin to grow again in the fourth quarter of 2003 or the first quarter of 2004, a quarter or two behind gross domestic product."