Hewitt Associates Feels Downturn
Suburban Chicago-based Hewitt Associates (HEW - Analyst Report) is one of the leading providers of human resources outsourcing and consulting services in the world. With more than 60 years of experience in human resources, Hewitt now provides human resources services in 33 countries.
Employment service companies generally participate in the later stage of an economic recovery. With the unemployment rate having risen to 6.1% in August, the expected economic weakness should hamper the financial results of employment-related companies such as Hewitt Associates.
While Hewitt is the clear leader in the emerging human resources BPO (business process outsourcing) market, the target price is $40.25, which is a 20 P/E multiple on trailing 12-month EPS. Given the minimal expected price appreciation, the stock is rated a Sell.