Deutsche Bank Sees Robert Half As A 'Tactical Buy'

Historical trading patterns suggest 15-20 percent upside potential for Robert Half International Inc. RHI, Deutsche Bank’s Kevin McVeigh said in a report. He initiated coverage of the company with a Buy rating and a price target of $44.

Robert Half has a strong brand on account of the company’s long history and market leading position. Moreover, management has exhibited “impressive execution” in developing and growing the business, analyst McVeigh mentioned. He added that the stock appeared to be “too low not to recommend.”

Tactical Buy

The prospects of the Staffing industry are limited by continued productivity weakness and slowing full-time job growth over the next few quarters. The industry being in the late cycle, coupled with macro and global political uncertainty, “makes the group as a whole difficult to navigate,” McVeigh commented. He added that against this backdrop, Robert Half’s stock represents a “tactical buy” for investors.

Lower Risk Profile

The analyst pointed out that Robert Half’s current CEO and CFO had been with the company for more than 30 years. “This tenure has helped navigate through cycles, make successful acquisitions, and launch new services, all of which offer investors a level of comfort not available at many other staffing firms.”

Moreover, almost all of Robert Half’s growth had been organic. These factors lower the company’s risk profile, McVeigh commented.

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