Thursday, FBR Capital Markets upgraded Taleo Corp. (TLEO) shares to Market Perform from Underperform and increased its price target to $17 from $14.
Analyst David Hilal said that when he downgraded the shares, he noted that second half of 2009 estimates appeared overly optimistic and that consensus estimates needed to be lowered. This has since played out, and while the shares have underperformed (+2%) on a relative basis versus Nasdaq (+9%) and its SaaS peer group (+17%); absolute downside has been and may continue to be limited.
The analyst believes the shares now carry a more neutral risk/reward given lower second half of 2009 estimates that now appear more realistically set, recent relative underperformance, and his checks that do not indicate the demand for HCM solutions has further deteriorated.
The analyst generally remain neutral on the HCM market since he believe budgets remain constrained, and these solutions are not a high priority spend, and a jobless recovery could mute the demand for talent management solutions in the near term.
The analyst increased his price target via a higher multiple to reflect his reduced concerns that estimates will not be met in second half of 2009. The analyst's new price target of $17 represents 20x his 2010 pro forma EPS estimate, a multiple that is roughly in line with the company's normalized growth rate.
Currently, TLEO is up $0.62 or 3.27% and trading at $19.59.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.