Panmure Liberum ups Hays to 'buy' from 'hold', shares spark

(Sharecast News) - Hays shares sparked on Friday after Panmure Liberum upgraded its stance on the recruiter to 'buy' from 'hold' and hiked the price target to 100p from 35p. Panmure noted the shares have more than doubled from their spring 20-year lows, but said it was too early to increase forecasts.

It pointed out that management's Momentum strategy targets more than £1bn of net fee income and 25% EBIT conversion but said we've "been there before and market headwinds have prevailed".

"Is anything different this time? Perhaps," said Panmure. "The strategy has shifted from widening geographic and sectoral growth to rationalisation and focus. Our work suggests that there could be circa 50% upside to FY27E EBIT if management executes on its cost plan."

Panmure said that for the first time in a long time, it sees "an asymmetric risk profile to the upside on forecasts", although it's "likely to be a bumpy ride".

At 1406 BST, the shares were up 4.7% at 76.55p.