) to neutral from reduce.
Analyst Tobey Sommer says his upgrade is based on: 1) generally improving economy, improvement in employment in Administaff markets specifically; 2) his expectation for growth in worksite employees (WSEs) in 2005; 3) his view that Administaff share repurchase could limit downside risk; and 4) his belief that the company should perform at least in-line with the market over the next year.
Sommer notes Administaff has achieved four consecutive quarters of accelerating growth in WSEs. He sees 12% volume growth in 2005 on an improving jobs picture, and 3% price increases. He forecasts 51 cents 2004 earnings per share, and 64 cents earnings per share for 2005.