Lehman Brothers downgraded Robert Half (RHI) to underperform from market perform.
Analyst Adam Waldo says this is the company's fourth straight quarterly miss. He says the shortfall is due to the absence of the company's historic pattern of first quarter seasonal uptick in revenue vs. the fourth quarter. He believes this augurs poorly for a near-term bottom in operations and for overall visibility of 2002 EPS. Waldo sees $180 million in 2002 free cash flow, and $181.8 millin for 2003. He cut his $0.55 2002 EPS estimate to $0.30-$0.40, and cut the $1.00 2003 EPS to $0.72.
Waldo believes shares are significantly overvalued. He says $15-$16 is an appropriate trough valuation, and he would be a buyer in the $19-$20 range.