CCRN inventory slips as Trusit downgrades on labor market circumstances (NASDAQ:CCRN)

Cross Nation Healthcare (NASDAQ:CCRN) fell ~4% pre-market Wednesday after Truist downgraded the Florida-based healthcare staffing agency to Maintain from Purchase citing a balanced danger profile given the labor market trajectory.

The analysts led by Tobey Sommer argue that rising unemployment might make it extra handy for hospitals to fulfill labor demand with inexpensive wages paid to full-time staff, subsequently relying much less on non permanent labor, which might affect CCRN.

Sommer added that if labor circumstances maintain, with a excessive demand for well being professionals, together with non permanent employees, there’ll solely be a modest upside to the corporate’s 2023 estimates.

Nonetheless, the analyst downgrades the inventory citing draw back dangers, together with opposed affect on demand and pricing for temp nurses as a result of larger unemployment within the occasion of a recession. But, Truist raises the worth goal on CCRN to $2.97 from $2.63 to mirror the consensus.

With a Purchase suggestion, the agency stays bullish on CCRN’s rival AMN Healthcare Companies (AMN), arguing that the latter is extra proof against demand/pricing strain given its give attention to massive current shoppers as an alternative of development maximization.

Moreover, Truist cites the current outperformance of CCRN shares: The inventory has added ~39% over the previous 30 days in comparison with the ~16% rise within the AMN, as indicated on this graph.