Results: Adecco Group AG Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in Adecco Group AG (VTX:ADEN) had a good week, as its shares rose 7.9% to close at CHF24.20 following the release of its quarterly results. Adecco Group reported €5.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.52 beat expectations, being 7.7% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the current consensus from Adecco Group's 15 analysts is for revenues of €23.7b in 2026. This would reflect a credible 3.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 35% to €2.26. Before this earnings report, the analysts had been forecasting revenues of €23.7b and earnings per share (EPS) of €2.32 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for Adecco Group

It might be a surprise to learn that the consensus price target was broadly unchanged at CHF26.87, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Adecco Group, with the most bullish analyst valuing it at CHF42.82 and the most bearish at CHF18.99 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Adecco Group's revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2026 being well below the historical 3.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Adecco Group.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Adecco Group. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Adecco Group's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Adecco Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Adecco Group going out to 2027, and you can see them free on our platform here..

Even so, be aware that Adecco Group is showing 3 warning signs in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.