ManpowerGroup Must Beware Of Tariff Overhang Despite EU Upside: JPMorgan

JPMorgan analyst Andrew C. Steinerman slashed the price forecast of ManpowerGroup MAN following its first-quarter fiscal year 2025 results reported last week.

The company reported a sales decline of 7.1% year-on-year to $4.09 billion, beating the analyst consensus estimate of $3.96 billion, and adjusted EPS was 44 cents, missing the consensus of 50 cents.

ManpowerGroup expects second-quarter EPS of 65 cents to 75 cents, versus an estimate of 95 cents.

Steinerman cut the price forecast from $65 to $50 while retaining a Neutral rating.

The analyst notes that higher SG&A expenses contributed to the EPS miss, owing to ongoing investments in the back-office transformation efforts.

The analyst acknowledges the company’s decision to provide second-quarter guidance amid the highly uncertain environment, a step many companies might avoid.

However, concerns around tariffs go well beyond the near term, and the market’s negative response likely reflects unease over the limited visibility into potential longer-term impacts, adds the analyst.

The analyst says that management caveated their cautious outlook by highlighting potential upsides from a resolution in U.S.-European trade tensions, which could boost staffing demand.

Additionally, Manpower's view that ongoing trade disputes may drive greater economic self-sufficiency in Europe, notes the analyst.

Steinerman lowered adjusted EPS estimates for FY25 to $3.01 (from $4.03) and for FY26 to $5.33 (from $6.45).

Investors can gain exposure to the stock via WisdomTree U.S. SmallCap Quality Dividend Growth Fund DGRS.

Price Action: ManpoweGroup shares are down 0.97% at $39.72 at the last check Monday.

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