Broker snap: SThree's rating downgraded

31st Jan 2011 10:51

After a strong run, SThree has been was hit with a downgrade by Peel Hunt despite 'in line' results and a positive 2011 outlook.The broker notes that all of the recruitment specialist's markets exited 2010 in growth. Furthermore, management has a confident outlook for the current year, with expected expansion in existing markets as well as continued investment in new geographies.While the full-year results broadly matched Peel's estimates, the broker highlights that the shares have surged 70% since August and have caught up with its target price of 400p."We fundamentally like SThree - it is well positioned for growth, well managed, has a strong cash position and a scalable business model," says analyst Henry Carver. "However, with no change to numbers and following a strong recent run, we are moving our recommendation [from 'buy'] to 'hold'."