Liberum continues to see WPP (LON:WPP) as a ‘buy,’ while noting that its chief executive’s resignation will raise speculation about the advertising giant’s future, Citywire reports. The comments come after the FTSE 100 group announced over the weekend that Sir Martin Sorrell was quitting the company, following an independent counsel to look into allegations of ‘personal misconduct’.
WPP’s share price fell sharply on the news, shedding 6.48 percent to close at 1,111.00p. The shares underperformed the broader UK market, with the benchmark FTSE 100 index losing 66.36 points to end the session 0.91 percent in the red at 7,198.20. The group’s shares have lost more than 36 percent of their value over the past year, as compared with about a 1.8-percent dip in the Footsie.
Liberum retains ‘buy’ rating
Liberum reiterated its ‘buy’ rating on WPP yesterday with a price target of 1,750p on the shares. Citywire quoted the broker’s analyst Ian Whittaker as commenting yesterday that Sorrell’s resignation would ‘raise speculation about the future of the group’.
“We think there is a significant possibility that WPP will now sell its data investment – market research unit – and public relations, but that the rest of the group will be kept,” he pointed out, adding that this should “drive a closing of the gap between the valuations and performance of WPP and the other agencies”.
Other analysts on ad giant
The 26 analysts offering 12-month price targets for WPP for the Financial Times have a median target of 1,420.00p on the shares, with a high estimate of 1,940.00p and a low estimate of 1,080.00p. As of April 16, the consensus forecast amongst 29 polled investment analysts covering the advertising giant advises investors to hold their position in the company.