ManpowerGroup Shares: A Potential Turnaround Story?

ManpowerGroup's stock is showing early signs of a rebound today, gaining approximately 0.5% to reach $28.75. This movement creates some distance from last Friday's 52-week low of $28.31. The catalyst for this upward shift appears to be a significant earnings estimate revision from the research firm Zacks.

Zacks Research has issued a substantially more optimistic forecast for ManpowerGroup's future profitability. The firm has raised its 2025 earnings-per-share (EPS) projection from $2.71 to $2.84. The outlook for the subsequent years is even more robust, with estimates now set at $3.61 per share for 2026 and $4.95 per share for 2027.

This positive adjustment arrives at a critical moment for the staffing company, which faced a wave of downgrades from major banks as recently as October.

Contrasting Views and Underlying Challenges

This newfound optimism stands in stark contrast to the sentiment that prevailed just a few months ago. Following the third-quarter earnings report, several prominent financial institutions slashed their price targets. Goldman Sachs reduced its target from $37 to $33, maintaining a "Sell" rating. Barclays made a more severe cut, lowering its target from $50 to $42.

Should investors sell immediately? Or is it worth buying ManpowerGroup?

These downgrades occurred despite ManpowerGroup delivering a Q3 performance that surpassed market expectations. The company reported earnings of $0.83 per share on revenue of $4.63 billion. However, a deeper look reveals the underlying issues.

The $0.83 EPS figure represents a significant decline from the $1.29 per share earned in the same quarter last year. The bottom line was negatively impacted by $0.45 per share due to restructuring costs and foreign exchange losses. Consequently, the margin remained in negative territory at 0.12%.

Assessing the Path Forward

The central question for investors is whether the Zacks upgrade can genuinely reverse the stock's downward trajectory. For the current fourth quarter, ManpowerGroup's own internal guidance forecasts earnings between $0.78 and $0.88 per share. There is hope that cost-saving measures implemented throughout 2023 and 2024 may finally begin to yield tangible benefits.

Nevertheless, significant challenges remain. S&P Global continues to assign a "negative" outlook to the company, projecting a revenue decline of approximately five percent for 2025. In the cyclically sensitive staffing industry, any potential recovery remains inherently fragile.