Wachovia Downgrades Monster Worldwide (MWW) to Underperform
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Wachovia downgrades Monster Worldwide, Inc. (NYSE: MWW) to Underperform.
Wachovia analyst says, "We think the slope of the eventual recovery will be flatter than anticipated, 2H09/2010 budgets are weaker than expected, discounting will have LT ramifications on the industry, and that MWW's future earnings power will be below the last peak due to structural changes in the industry. We rate the stock UP with a $9-10 val. range, and our 2QE EPS is $0.00 vs. our prior $0.01."
"Pricing pressure may be increasing. The low marginal costs and incentives for price competition in online recruitment raise concerns over industry fundamentals - pressures have been mounting, with more frequent & larger promos. Channel checks suggest the industry may be on the verge of more price cuts that would further commoditize online recruitment, and the earnings power of the biz model."
"We think MWW's adressable core recruitment both in the U.S. and to a lesser extent abroad is lower than market expectations, as the Internet continues to pressure prices of core postings due to competition and evolving recruitment strategies. We think MWW's business will have earnings of $0.69 in 2012, or 52% below the $1.43 peak in 2007. We are currently modeling 10.6% operating margins in '12 vs. mgmt's previous target for '08 of 25%."
To see more analyst ratings on MWW Click Here.
Monster Worldwide, Inc. (Monster) provides a global online employment solution. With a presence in markets in North America, Europe and Asia, Monster works by connecting employers with job seekers at all levels and by providing personalized career advice to consumers globally.
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