Story
Robert Half Stock Rises on BMO Upgrade, 'Cyclical Bottom' Thesis
Summary
Shares of staffing firm Robert Half gained after BMO Capital upgraded the stock to Outperform, citing a belief that the company's business hit a cyclical bottom in the second quarter.
Shares of global staffing firm Robert Half (NYSE: RHI) climbed 1.2% in pre-market trading after BMO Capital upgraded the stock, suggesting the company's operational performance may have hit its low point for the current economic cycle.
BMO Cites Cyclical Turning Point
BMO Capital upgraded Robert Half to Outperform from Market Perform and raised its price target to $47 from $45, according to a note published July 27. The analyst's thesis is centered on the view that the second quarter of 2026 represented a cyclical bottom for the company.
BMO anticipates that Robert Half will return to year-over-year revenue growth and see margin expansion beginning in the third quarter of 2026. The note also highlighted that staffing stocks have historically tended to outperform in the early stages of an economic recovery, a dynamic that could be attracting fresh investor interest.
Follows Q2 Earnings and Analyst Revisions
The upgrade follows Robert Half's second-quarter earnings report, which was released on July 23. The company's results and third-quarter outlook have prompted several analysts to reassess their positions.
Ad- Q2 Revenue: $1.34 billion, slightly ahead of the $1.32 billion consensus estimate.
- Q2 Earnings Per Share (EPS): $0.26, meeting analyst expectations exactly.
- Q3 Revenue Guidance: A range of $1.31 billion to $1.41 billion, which was broadly in line with the consensus forecast of $1.35 billion.
Following the report, Truist maintained its Buy rating while increasing its price target to $50 from $40. In a more cautious take, Goldman Sachs kept its Sell rating but lifted its target to $29 from $26, reflecting a mixed but generally improving sentiment on the stock's valuation.
Market Context
A supportive macroeconomic backdrop is also providing a tailwind for the stock, with major indices like the S&P 500 and Nasdaq showing gains in the session. As a professional services firm, Robert Half's performance is closely tied to labor market conditions and broader investor confidence, both of which appeared constructive in early trading.
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