Recruit Holdings Earnings: A More Stable Environment on the Horizon

Narrow-moat Recruit Holdings' full-year results were slightly better than we expected. We raise our fair value estimate by 3% to JPY 6,700 per share following fiscal 2023 earnings, which ended in March 2024. Recruit believes job markets are finally stabilizing after years of volatility due to the covid pandemic and reinstated its full-year guidance. Our revenue forecast for fiscal 2024 remains unchanged, coming in a little above the middle of the guidance range. Our adjusted EBITDA forecast is slightly raised, increasing by 2%, based on management's commitments to maintain disciplined spending, and is slightly below the middle of the guidance range. We expect more job market normalization and cost inflation for the group to present headwinds during the year. At current prices, Recruit shares screen as fairly valued.