Two major brokers are backing Hays, the FTSE 250 recruiter, to deliver significant share price upside as signs of a cyclical recovery emerge from its first-quarter trading update.
Deutsche Bank rates the shares a buy with a 95p target, implying nearly 48% upside from Friday's close of 64.25p.
RBC Capital Markets is also positive with an outperform rating and an 85p target, around 32% above the current price.
Group net fees, a measure of gross profit from recruitment, fell 3% year on year in the quarter on a like-for-like basis, beating consensus of a 4% decline.
That marked an improvement from a 5% fall in the third quarter and an 8% drop in the fourth.
Half of net fees are now growing, up from just 30% in the previous quarter.
Temporary placements fell 1% while permanent hiring dropped 7%, though both trends are moving in the right direction.
Germany remains the engine of the business, contributing around 30% of net fees but about 85% of group profit in 2026.
The German temporary workforce has shrunk sharply due to the automotive downturn, with car industry placements falling from around 2,500 to just 600.
Hays is pivoting towards construction, engineering and life sciences to compensate, and moving up the salary bands to improve margins.
RBC made no material changes to its estimates, forecasting earnings per share of 1.80p for 2027 and 4.26p for 2028.
The broker is also less worried than most about artificial intelligence disrupting demand for specialist staffing in the near to medium term.
