Deutsche Bank sees 56% upside in SThree, the STEM-focused staffing group, with analyst Steve Woolf repeating a Buy rating and 260p price target
It comes after SThree, which trades at 166.8p, reported a half-year trading update that Woolf said represents gradual but tangible progress.
Progress came in the form of slower decline rather than growth, with net fees declining 6% year-on-year on a like-for-like basis, an improvement on the 8% decline recorded in the first quarter and the fourth quarter of last year.
Woolf singles out the United States as the standout driver for the business, with US net fees rising 16% year-on-year compared with 8% growth in the first quarter, led by a return to growth in Life Sciences and strengthening demand for engineering recruitment tied to infrastructure projects including power generation; contract and temporary fees, which account for approximately 85% of group revenues, also narrowed their decline to 6% from 8%, though permanent fees fell 10%.
The analyst's write-up comes ahead of full half-year results, scheduled for 21 July.
