Deutsche Bank Starts On Assignment (ASGN) at Buy
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Deutsche Bank initiated coverage on On Assignment (NYSE: ASGN) with a Buy rating and a price target of $44, implying upside of 30%.
Analyst Kevin McVeigh said, "As we assume there will be less rather than more macro uncertainty in the months to come, we rate the ASGN stock a Buy due its attractive end markets, client mix, durable buyback, reasonable expectations, and attractive relative valuation. On Assignment is gaining market share in IT staffing — which we believe will be one of the healthiest disciplines over the next 3-4 years — regardless of the economy. IT staffing is benefitting from continued technology innovation, required implementations, system upgrades, and maintenance. Despite the uneven macro outlook, there is still a lot of money being spent on IT services and the shift between internal vs. external execution, as favors On Assignment. The scarcity of IT talent also provides some cushion to growth even in an underwhelming GDP environment. In addition to outsized exposure to favorable end markets, we believe On Assignment is gaining market share. Impressive execution by its strong management coupled with the 2015 hiring surge should help drive continued future outperformance above its peers, ultimately driving strong top and bottom-line results. Finally, we believe On Assignment was able to acquire Creative Circle for $570m in June 2015 and Apex Systems for $600m in May 2012, both of which were very attractive prices. Creative’s unique value proposition coupled with Apex’s operational excellence should help create value over time."
Shares of On Assignment closed at $36.17 yesterday.
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