Yahoo Finance WPP shares rise after ad group's rating upgraded by Exane
By Scott Kanowsky
Investing.com -- Shares in WPP PLC (LON:WPP) rose on Wednesday after analysts at BNP Paribas Exane upgraded their rating of the world's biggest advertising group to outperform from neutral.
The analysts also named WPP as its top pick for the next 12 months in the ad sector, citing an expected easing in margin pressures. They also hiked their estimates for WPP's earnings per share in 2024-25 because of an expected increase in organic growth.
Exane's commentary comes after WPP said in February that it anticipates that like-for-like revenues will expand by between 3% to 5% in 2023 despite ongoing macroeconomic uncertainty. The forecast topped many analyst projections.
London-based WPP, which owns agencies like Ogilvy, Grey, and GroupM, said at the time that it sees ad spending remaining resilient this year. The group argued that clients have suggested that they may need to continuing forking out cash on marketing to boost sales and defend inflation-driven price rises.
The upbeat outlook was echoed by WPP's peers in the ad sector, including Publicis Groupe SA (EPA:PUBP), Omnicom Group Inc. (NYSE:OMC) and Interpublic Group of Companies, Inc. (NYSE:IPG), in a sign that the industry is having some success convincing clients that they should not cut back on ad spending. The analysts at Exane said that their outlook for the sector is "turning more positive."
Shares in WPP have gained nearly 15% in 2023, while Publicis has increased by nearly a fifth. The Stoxx 600 Media index, which includes some of the largest players in the ad sector, has risen by just under 10% year-to-date.
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WPP shares rise after ad group's rating upgraded by Exane
