Randstad Still Making Hay in the First Quarter

Against relatively easy comparatives, recruitment giant Randstad proffered up solid result in the first quarter. Organic revenue growth rose above 15%, and EBITA was up more than 40%. Despite macroeconomic concerns that have been driving down the share prices of Randstad and peer Adecco since mid-February, the company’s outlook remains positive, with management reporting that the positive momentum seen in the first quarter is continuing into April. While we understand investors’ trepidation in holding a temporary recruitment stock going into a possible recession, we believe a significant margin of safety exists between the current share price and our EUR 63 fair value estimate.