On Tuesday, BMO Capital Markets adjusted its outlook on TrueBlue Inc (NYSE:TBI), a staffing services company, by reducing its stock price target to $13 from the previous $15, while maintaining an Outperform rating on the shares.
The revision follows TrueBlue's latest earnings report, which revealed an adjusted earnings per share (EPS) that exceeded expectations, driven by tax benefits and improved margins. The company's revenue was reported to be in line with predictions.
TrueBlue's management has indicated a mixed operating environment, with certain areas such as manufacturing, renewable energy, and transportation showing signs of recovery. Despite broader market challenges, these sectors suggest potential growth spots for the company.
The guidance for the second quarter of 2024 suggests that TrueBlue is on a path to continued year-over-year stabilization. This outlook is set against a backdrop of comparably lower performance benchmarks from the previous year, which may ease the path to apparent recovery.
In response to the recent financial disclosures, BMO Capital has revised its estimates and the target price for TrueBlue. Still, the firm's analysts express confidence in TrueBlue's potential to outperform its peers as the sector it operates in begins to recover.
The new stock price target reflects a more conservative valuation in light of the current operating conditions while still signaling an expectation for the company's stock to perform well relative to the market.
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