RBC Capital trims Hays price target

In an update for the three months to the end of June, the company said group net fees declined 15%. Fees were down 17% in the UK and Ireland, 22% in Australia and New Zealand and 17% in Germany. Meanwhile, rest of world fees were 11% lower.

Hays also said that the June exit rate was down 18%, hit by "challenging" conditions in Germany and Australia, and the negative effects of elections in the UK and France.

"Reflecting the increasingly challenging trading conditions as fiscal Q4 progressed and management's latest prognosis for near-term profitability, we lower our FY24 and FY25 EPS estimates by 6% and 36% respectively," RBC said.

In turn, it reduced its price target to 125p from 130p, but said it still sees an attractive longer term risk-reward profile.

"On a through-cycle basis, we expect meaningful shareholder returns via special dividends, albeit on our current estimates, we assume no specials will be proposed for FY24 or FY25," RBC said.

"We believe HAS looks attractive versus history on the EV/net fees metric in particular, which has historically helped to put a 'floor' under the share price."

RBC rates the stock at ‘outperform’.