UBS raises Korn/Ferry stock price target to $82 on revenue beat

UBS has increased its price target on Korn/Ferry shares (NYSE:KFY) to $82, up from $75, on Wednesday. This adjustment comes after the company reported strong first-quarter performance, including a revenue beat and an acceleration in new business growth to 12%. Korn/Ferry also provided a second-quarter organic revenue guide that surpassed expectations.

Despite the positive results, the stock fell 1% to $80.22 that day. The stock has gained 32% over the past six months and is currently undervalued based on InvestingPro analysis. Recently, Korn/Ferry completed the acquisition of AMS, a $4 billion market cap company for $1 billion. UBS maintains a neutral rating on the stock but acknowledges the company's strong balance sheet, with more cash than debt, which supports its ability to manage the integration.

The firm also notes limited information on how the $40 million of incremental EBITDA from the AMS acquisition will be generated beyond revenue synergies. Korn/Ferry's adjusted earnings per share guidance for the second quarter fell short of Street expectations. UBS does not model any synergies initially due to uncertainty in their generation, considering potential synergies as future upside. The firm's risk-reward profile remains balanced due to limited conviction in near-term execution.