Despite June Jobs Numbers, BMO Sees Staffing Stocks Reporting Sluggish Q2

Despite the strong jobs report seen in June, analysts at BMO Capital Markets are still not sold on staffing stocks in Q2.

While analysts believe June was a better month for most providers, it likely was not enough to save the quarter.

BMO Capital Markets analysts expect a sequential slowdown from Q1 to Q2, as industry data have shown that trends have worsened in recent months.

"In our 2Q16 proprietary survey of 70 privately held staffing providers, the group generated the slowest revenue and net income growth since 4Q14. Lower-skilled suppliers continued to lag," said BMO Capital Markets in a recent analyst note.

Related Link: U.S. Companies On Hiring Sprees Across The Country

While the firm is not predicting a U.S. recession, it has lowered ratings and reduced targets of most of the staffing stocks the company's covers, including Monster Worldwide, Inc. MWW from Outperform to Market Perform and Trueblue Inc TBI to Underperform.

One area of strength, however, has been the healthcare sector, where BMO Capital Markets increased targets for AMN Healthcare Services, Inc. AHS and Cross Country Healthcare, Inc. CCRN due to strong demand/supply imbalance.

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