Broker snap: Credit Suisse raises Hays to outperform

1st Jul 2013 13:12

While recruitment outfit Hays is expected to continue to meet challenging conditions in Australia its current share price is currently discounting almost no value in its UK segment. Furthermore, the company's stock is trading at a calendar year 2013 price-to-earnings ratio of 13.6, versus an average of 16.5 for other professional staffers. Not only that, the highly operationally geared UK business is expected to recover, driven by both cost reduction and a return to gross profit growth. As well, the Australia business has proved adept at rapidly cutting costs historically and already began that process at the end of calendar 2012.For all of the above reasons analysts at Credit Suisse have decided to raise their view on the company's shares to outperform from neutral, alongside a price target of 99p.