Robert Half International (RHI) aggressively hired recruiters at the end of the downturn and at the beginning of the upturn, getting a head start against the competition and taking market share, and the stock is expected to appreciate from current levels, says Jeffrey M. Silber, Managing Director at BMO Capital Markets Corp.
“Historically, Robert Half’s stock trades at a premium, but not now, as it is trading roughly in line with the group at about 16 times next year’s earnings. So it’s another one that we think we can get multiple expansion on top of positive estimate revisions as well,” Silber said.
Silber says later-cycle staffing companies like Robert Half tend to do better as the economic recovery matures, and he goes on to say that an economic upturn is good for temporary staffing in general. He also says the vertical RHI works is doing well this cycle regardless of the passing of previous catalysts.
“Robert Half is typically known as the class of the staffing sector. They focus mostly on accounting and finance staffing. We don’t have the Sarbanes-Oxley bubble that we had last cycle that really drove a lot of demand in accounting and finance, but accounting and finance staffing is still doing fairly well this cycle,” Silber said.