TrueBlue’s prolonged turnaround prompts Baird to trim stock PT By Investing.com

On Tuesday, Baird adjusted its outlook for staffing company TrueBlue (NYSE:TBI), reducing its price target to $13.00 from the previous $14.00, while keeping an Outperform rating on the stock. The firm noted that TrueBlue is facing persistent challenges across most of its operational verticals and service areas.

Despite these headwinds, the company’s management has been proactive in adjusting expenses, leading to a bottom line that surpassed initial apprehensions. This resulted in the company’s shares rising approximately 4% in after-hours trading, albeit on low volume.

The firm’s analysis indicates that difficult conditions are expected to persist for TrueBlue in many of its business segments. However, it also highlighted that certain sectors such as renewables, manufacturing, transportation, and healthcare are beginning to exhibit some growth. In light of these factors, the financial firm has revised its estimates and price target downward, acknowledging that the company’s recovery is taking longer than previously anticipated.

Baird’s commentary reflects a belief that while TrueBlue’s stock is currently priced lower compared to its historical earnings power, which averaged an EPS of $2.05 in the five years before the pandemic, the stock remains a valuable investment. The company’s financial health is bolstered by a solid balance sheet, which provides some reassurance amidst the ongoing challenges.

TrueBlue’s current situation is a mix of enduring difficulties in most of its business areas, with a few bright spots in specific segments showing growth potential. The staffing firm’s efforts to manage its expenses have been recognized as a positive move in the face of these challenges.

In summary, Baird’s revised price target for TrueBlue reflects a cautious but still optimistic stance on the company’s future performance. The firm acknowledges the tough market conditions TrueBlue is navigating but also notes the company’s intrinsic value and solid financial foundation.

InvestingPro Insights

TrueBlue’s proactive management strategy is reflected in the recent InvestingPro data, which shows that the company holds more cash than debt on its balance sheet, a sign of financial prudence and stability. Moreover, TrueBlue’s management has been aggressively buying back shares, demonstrating confidence in the company’s value proposition and providing a high shareholder yield….