PageGroup PLC 

PageGroup PLC (LSE: PAGE) is an FTSE 250 index-listed company offering recruitment consultancy and other ancillary services under three brands: Michael Page, Page Personnel, and Page Executive. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 454.60

• Resistance near Current levels: PAGE’s stock price crossed the Resistance (R1) which was stated in the previous report on 06 November 2023, and might witness some sell-off from the current levels. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Sluggish Profitability Margins: In H1 FY23, the Gross margin of PAGE was 51.0% against the industry median of 73.2%, and the EBITDA margin declined to 9.3% in the reported period (H1 FY23) as compared to the industry median of 16.4%. Also, the net margin slipped to 4.2% in H1 FY23 versus the industry median of 5.7%.

• Expensive Valuation: The stock of PAGE is currently offered at 14.5x on Price/ Earnings relative valuation (NTM) as compared to the industry (Industrials) median of 11.3x. On Price/cash flow-based relative valuation (NTM), the stock is valued at 9.1x which is higher than the industry median of 8.1x.

• Inefficient Debt Management: The company reported a Debt/ Equity ratio of 0.31x in H1 FY23 as compared to 0.26x in H1 FY22. Also, the % of long-term Debt to Total Capital of the PAGE was 16.1% in H1 FY23, which is higher than 14.7% in pcp.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on JD PageGroup PLC (LSE: PAGE) has been given at the closing market price of GBX 454.60 (as of 05 December 2023).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 05 December 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.