On Jul 31, we upgraded staffing & outsourcing company
) to Outperform based on its improved prospects. Manpower became
a Zacks Rank #1 (Strong Buy) stock shortly after reporting
impressive second-quarter results.
Why the Upgrade?
Earnings estimate revisions for Manpower have been portraying
an uptrend following the company's healthy second-quarter 2013
results. In the last 30 days, the Zacks Consensus Estimate jumped
14% for 2013, while it increased 10.7% for 2014.
ManpowerGroup posted adjusted quarterly earnings of $1.05 per
share that substantially surpassed the Zacks Consensus Estimate
and jumped 38% year over year.
It is encouraging to note that the company has surpassed the
Zacks Consensus Estimate by an average of 23.1% in the trailing
four quarters. We believe that the company's strategic
initiatives toward lowering costs and driving margins position it
well to sustain its growth momentum in 2013.
Manpower is now contemplating on exiting lower margin business
and venturing into high margin business. The ManpowerGroup
Solutions, the company's high margin business, sustained its
growth momentum during the quarter.
Going forward, Manpower expects to generate higher gross
margin from the Americas and Southern Europe, which in turn is
expected to boost its overall gross margins. Moreover, we believe
that the company's restructuring initiatives are expected to
result in higher savings and in turn higher profits.
With a well-established network in about 80 countries,
Manpower currently offers its services to about 400,000 clients.
We believe Manpower's brand value, comprehensive range of
services and a strong global network provides it a competitive
advantage over its peers,
Robert Half International Inc
Kelly Services, Inc
) and reinforces its dominant position in the market.
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