Broker snap: Robert Walters shares just the job

6th Jul 2011 13:45

The second quarter update from white-collar recruiter Robert Walters was an encouraging one, in the view of Merchant Securities, which remains bullish on the stock.All regions posted year-on-year (y-o-y) growth with Europe up 31% in constant currency, though the UK was "as expected, pretty flat although even here NFI [net fee income] growth was 5% y-o-y," Merchant's Ian Jermin notes."The group is on track to report NFI for the year of around £187m against our previous expectation of £185 but at this stage we are leaving earnings forecasts unchanged," Jermin advsed.The broker has a target price for the stock of 400p.That's higher than Panmure Gordon's price target of 379p, though both brokers agree that the shares are a "buy".Panmure Gordon said that the firm's top line growth in the first half was ahead of the broker's expectations, and there are "suggestions that European growth looks better than expected by some margin.""Growth continues to be driven by overseas expansion, with further progress expected and new office openings assisting expansion against a challenging UK environment, albeit that 75% of NFI is outside the UK," write Panmure analysts Paul Jones and Mike Allen. "All things being equal this should point towards full year numbers towards the top of the range, though with summer months notoriously quiet and uncertain macro signals we believe it may be early days yet," the analysts added.--jh