Korn Ferry (KFY) is seeing positive momentum from a competitor's recent acquisition and is poised for strong performance in its high-margin Digital and Executive Search segments, Truist Securities said in a Tuesday note.
Truist now expects fiscal Q2 Executive Search revenue to be flat quarter over quarter, an improvement from its earlier forecast of a 2% decline, following better-than-expected results from rival Heidrick & Struggles.
The firm raised its 2026 adjusted earnings-per-share estimate to $5.24 from $5.12 and increased its 2027 EPS forecast to $5.83, citing improving search revenue trends and benefits from the company's diversified portfolio. Analysts surveyed by FactSet expect $5.24 and $5.71, respectively.
According to the note, Truist expects Korn Ferry's 2026 Talent Suite rollout to further strengthen growth in the company's higher-margin Digital unit, which already generates significant recurring revenue and strong EBITDA margins.
The firm maintained its buy rating on the stock with an $88 price target.
Shares were up 3.6% in Tuesday afternoon trading.
Price: 66.62, Change: +2.24, Percent Change: +3.47