Argus analyst Jasper Hellweg downgraded ManpowerGroup to Hold from Buy following its Q3 revenue miss and below-consensus guidance for Q4 earlier this month. The analyst notes the company is facing headwinds from a tight U.S. labor market, a change in French employer tax credits, and Brexit uncertainty, also cutting his FY19 and FY20 EPS views by 32c and 33c to $7.39 and $7.97 respectively. Given the current challenges, Hellweg contends that ManpowerGroup is "fairly valued" at 12.5-times his expected 2019 EPS view, which is below its five-year historical average of 13.5-times and the peer average of 14.9-times.

"We anticipate diluted earnings per share in the second quarter will be between $1.24 and $1.34, which includes an estimated unfavorable currency impact of 7 cents and excludes unfavorable operating losses for the run-off Proservia Germany business estimated at 8 cents. Our guidance excludes any restructuring costs and any Argentina related impact of non-cash currency translation losses."

Reports Q1 revenue $4.4B, consensus $4.42B. Jonas Prising, ManpowerGroup Chairman & CEO, said, "Employers in North America and Europe remain cautious as they wait for signs that the economic environment is on a sustainable path of improvement. In some of those markets demand for staffing and permanent recruitment stabilized at lower levels, while demand across Latin America and Asia Pacific Middle East remained solid. We continue to prioritize the execution of our strategic initiatives and are accelerating sales activities to drive profitable growth when demand trends strengthen. We anticipate diluted earnings per share in the second quarter will be between $1.24 and $1.34, which includes an estimated unfavorable currency impact of 7 cents and excludes unfavorable operating losses for the run-off Proservia Germany business estimated at 8 cents. Our guidance excludes any restructuring costs and any Argentina related impact of non-cash currency translation losses."