On Thursday, Jefferies adjusted the firm's stance on Persol Holdings Co., Ltd (2181:JP) (OTC: TEMPF), shifting the rating from Buy to Hold. Accompanying this change, the price target was also revised downward from JPY390.00 to JPY240.00. This adjustment comes as Oiwa evaluates the company's financial structure and segment performance.
Persol Holdings, which operates within the human resources sector, is anticipated to benefit from an increase in wages and activity within the career segment. Nonetheless, the analyst expressed concerns regarding the company's ability to streamline underperforming divisions, particularly its international operations. These segments show an adjusted EBITDA margin of 2.4%, which is less than half of the company's overall margin of 5.4%.
The firm's high-end recruitment service, Doda X, initially viewed positively by Jefferies, now presents a challenge due to its performance figures being concealed within the broader career segment. This lack of transparency has led to difficulties in assessing the service's true impact on the company's financial health.
In his comments, the analyst justified the downgraded rating and price target, stating, "Given these concerns, we downgrade Persol to Hold and cut PT from ¥390 to ¥240, which equates to 11.7x FY3/26 diluted EPS of ¥20.6." This new price target is based on the company's diluted earnings per share forecasted for the fiscal year ending in March 2026.
The new rating and price target reflect Jefferies' recalibrated expectations for Persol Holdings' performance in the medium term. The firm's analysis suggests a more cautious outlook on the stock, urging investors to temper their expectations for growth based on the current assessment of the company's business segments and financial transparency.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.