No Signs of Recession for Randstad As It Delivers in the Second Quarter

With Randstad shares down on July 26, one could be forgiven for searching through the company's second-quarter update for a negative print, or weakly worded outlook. This is not the case, but investors’ disappointment can likely be traced back to the perceived slowdown in revenue growth, with organic revenue rising 9% during the second quarter, versus 15% in the first quarter. The difference is down to comparables, with coronavirus lockdowns hitting the business in the first quarter of last year, making for easier comparables. As such, we view the July 26 update as positive, with management still seeing strong demand for temporary and permanent workers in July. We reiterate our EUR 63 fair value estimate and believe current macroeconomic concerns have created an attractive entry point for the shares.