William Blair analyst Tim Mulrooney downgraded both Kforce (KFRC) and Korn Ferry (KFY) to Market Perform from Outperform without price targets. Professional staffing firms that are positioned across markets with structural labor shortages, such as travel nurse staffing or IT staffing, will likely perform better than during the Great Financial Crisis, Mulrooney tells investors in a research note. However, organic revenue trends across the staffing sector began to show a “clear deceleration” in Q3 after two years of strong growth, says the analyst. This, combined with expectations for an easing job market and rising macroeconomic uncertainty, “will likely continue to pressure professional staffing equities over the near term.” As a result, Mulrooney downgraded Kforce and Korn Ferry to Market Perform.
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