London-listed recruiters slump on RBC downgrades

Recruitment consultancy stocks were under the cosh after RBC Capital Markets downgraded some key names as it took a look at the Pan European staffing sector.

The Canadian bank downgraded Hays to ‘sector perform’ from ‘outperform’, keeping the 150p price target, as it sees little upside remaining after the recent rally.

“We also see growth remaining muted in the UK, while Australia remains volatile.”

It cut Michael Page International to ‘sector perform’ from ‘outperform’, trimming the target price to 530p from 610p as it looks for a better entry point.

“We remain supportive of Michael Page for the longer-term, but see greater short-term macroeconomic headwinds compared to our original expectations of accelerating growth into 2016E.”

RBC also downgraded SThree to ‘sector perform’ from ‘outperform’ and cut its price target to 400p from 460p.

The bank said it likes the stock for the long term, as it is well-placed with its developments in Life Sciences and the US.

In the shorter term, however, uncertainty, especially in the UK, has led it to lower all of its white collar staffing forecasts and recommendations.

“We look for a better in-price,” it said.

At 1227 GMT, Hays was down 1.7% to 139.70p, Michael Page was 1.8% lower at 488p and SThree was 3% weaker at 325p.