UBS upgrades Michael Page to ‘buy’ on hopes of earnings recovery Proactive uses images sourced from Shutterstock
UBS has upgraded Michael Page, the FTSE 250 recruitment group, to ‘buy’ from ‘neutral’, arguing the shares have been unfairly left behind by a wider sector rally.
The bank lifted its price target to 235p from 180p, implying upside of around 20% from the 195p at which the stock closed on 13 August.
Analysts Abi Bell, Rory McKenzie and Nicole Manion said Michael Page was entering the same phase of earnings stabilisation already seen across the staffing industry.
The stock has climbed roughly 43% from its April lows but remains down about 14% so far this year, against an average 17% gain for peers.
UBS said this underperformance was undeserved after it examined the group’s cost base and the latest market data.
Michael Page’s gross profit decline eased to just 0.2% year on year at constant currency in the second quarter, with about half of its markets now growing.
The bank expects a return to positive gross profit growth from the third quarter, helped by stronger areas such as executive search, US construction and Asia.
Management is targeting more than £40 million of annual cost savings from this year, which UBS believes will become increasingly visible as trading volumes stabilise.
The bank raised its earnings per share forecasts by up to 13% across 2026 to 2028, and now considers current market profit expectations achievable for the first time in four years.
Michael Page trades on 0.8 times enterprise value to gross profit, below its usual through-cycle range of 1.2 to 2.5 times.
In an upside scenario, driven by a full recovery in productivity, UBS sees the shares reaching 500p, or about 158% above current levels.
Its downside case, reflecting weaker fees and competition from digital hiring channels, points to 100p.