Deutsche Bank Maintains Buy Rating On Kforce

According to Deutsche Bank, Kforce KFRC gross margin headwinds offset strong demands. Deutsche Bank said that while 1Q EPS disappointed due to statutory costs, the major negative surprise is the approx. 75bp headwind to 2H11 gross margins from the HIRE act. “Our 2QE EPS goes from $0.21 to $0.19 (prior Street $0.20) and our 3QE EPS remains at $0.24 (prior Street $0.24). Our FY11E EPS falls from $0.84 to $0.79 (prior Street $0.80). We lower our PT from $23 to $20 to reflect our lower EPS est. and our expected 18x multiple on mid-cycle '12 EPS. We maintain our Buy due to the significant April share price decline and strong revenue trends.” Kforce closed yesterday at $14.96.