Hays Downgraded, PageGroup Share Target Cut: Jefferies Cautious on European Recruitment Sector

Jefferies has taken a more cautious stance on the European recruitment sector, cutting targets for PageGroup (LON: PAGE) and Hays (LON: HAS) and warning that earnings may remain subdued despite signs that revenue trends have stabilised.

PageGroup’s price target was reduced to 215 pence from 255 pence, with Jefferies maintaining a Hold rating. The broker said investors have repeatedly asked whether the sector is nearing a turning point, but it argued that “this time is different,” citing cyclical pressure compounded by structural challenges that could keep profits “lower for longer.”

PageGroup shares have fallen 32% over the past 12 months.

Jefferies also lowered its rating on Hays to Underperform from Hold, trimming the price target to 44 pence from 61 pence.

The firm made the same point about prolonged earnings pressure, saying that even as top-line performance appears to be bottoming, the backdrop remains more difficult than in past cycles. Hays shares are down 28% over the year.

The tone aligns with earlier caution from Morgan Stanley. In July, it cut Hays to Underweight, flagging downside risks to fiscal 2026 expectations and the possibility of a dividend reduction.

In December, Morgan Stanley also shifted PageGroup to Underweight, warning that artificial intelligence could erode organic growth and justify a further de-rating.

Jefferies said it sees limited catalysts for a near-term re-rating and expects companies across the sector to face a prolonged period of subdued demand and margin pressure.