Seek Slips Despite Dividend Boost, UBS Maintains Buy Rating

Highlights:

• Dividend Boost: Seek (ASX: SEK) raised its interim dividend by 26% to 24¢ per share, fully franked, signaling strong financial performance.
• Stock Dip: Despite the dividend increase, Seek’s shares dropped 0.3% at midday, reversing earlier gains.
• UBS Outlook: UBS maintained its “buy” rating but warned of potential broker downgrades due to valuation concerns and market sentiment.

Market Reversal After Early Gains

Seek Limited (ASX: SEK) saw its share price dip by 0.3% at midday, reversing earlier gains despite announcing a 26% increase in its interim dividend to 24 cents per share, fully franked. The job marketplace operator’s latest financial update initially sparked investor optimism, but the stock lost momentum as trading progressed.

UBS Forecasts Broker Downgrades

Investment bank UBS reaffirmed its “buy” rating on Seek but cautioned that broker downgrades could follow. Analysts suggest that while the dividend hike is a positive signal of financial strength, broader market sentiment and valuation concerns could weigh on the stock in the short term. UBS remains confident in Seek’s long-term growth potential, citing strong demand for its recruitment services.

Investor Sentiment and Future Outlook

Despite the stock’s slight decline, Seek’s fundamentals remain strong, with the company continuing to capitalize on hiring trends. Investors will be watching how analysts respond in the coming days, particularly in light of UBS’s expectations of possible rating adjustments. The market will also be looking at Seek’s next earnings report for further insights into its financial trajectory.

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