No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - The share price of Adecco dropped 10% on Wednesday after the recruitment, tech and advisory company underwhelmed with plans to accelerate its AI usage, as analysts raised doubts about the company's dividend potential.
The Swiss-French firm maintained its financial targets for the near term, including a commitment to a 3-6% EBITDA margin corridor, and keeping leverage - calculated as a net debt-to-EBITDA ratio excluding one-offs - at or below 1.5x by the end of 2027.
However, according to media reports, analysts have expressed concerns that achieving this leverage goal would come at the expense of shareholder payouts.
In its third-quarter results earlier this month, Adecco had reported that leverage had climbed to 3.0x by the end of the period, up from 2.8x a year earlier.
The company, which already lowered its dividend in February, will decide on its payout in February 2026, according to comments made by chief executive Denis Machuel in a media call on Wednesday.
The update came as Machuel outlined Adecco's "agility advantage value creation path" to drive profitable growth and share price gains. Machuel said Adecco would be a "pioneer" in the generative and agentic AI space, with agentic AI expected to to cover more than 50% of revenues by the end of 2026.
Key to this vision is the firm's joint venture with Salesforce, named r.Potential, created to help businesses manage "hybrid digital and human workforces", according to the CEO.
"Leveraging billions of data points, its solution will provide the intelligence to help enterprises create measurable business impact, strategically design and successfully run hybrid workforces. It will enable organizations to measure how effectively they convert combined human and digital capacity into productivity, adaptability and innovation at speed," Machuel said.
The stock was down 9.7% at CHF22.30 by 1345 GMT.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.