WPP share price: Credit Suisse lowers ad giant’s valuation

Analysts lower organic growth forecasts

WPP share price: Credit Suisse lowers ad giant’s valuation

Credit Suisse has lowered its price target on WPP (LON:WPP) ahead of the advertising giant’s third-quarter trading statement this week. Proactive Investors reports that the move came as the analysts trimmed their 2018 and 2019 organic growth forecasts to factor in ‘a string of account losses’.

WPP’s share price has been little changed in today’s session, having given up 0.1 percent to 1,042.00p as of 13:30 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.98 percent lower at 6,973.79 points. The group’s shares have given up more than 23 percent of their value over the past year, as compared with about a near seven-percent dip in the Footsie.

Credit Suisse weighs in on WPP

Credit Suisse, which has a ‘neutral’ rating on WPP, lowered its price target on the stock from 1,320p to 1,200p today. Proactive Investors reports that the move came as the analysts trimmed their 2018 organic growth forecast for the ad giant by one-tenth of a percentage point (10 basis points, or bps) to 0.5 percent, and their 2019 forecast by 80 bps to 0.6 percent.

Credit Suisse believes that the current valuation likely already reflects potential restructuring, noting that, “the greater uncertainty lies in growth levels”. WPP has been in restructuring mode following the departure of its chief executive Sir Martin Sorrell earlier this year.

Other analysts on ad giant

The 26 analysts offering 12-month price targets for WPP for the Financial Times have a median target of 1,300.00p on the shares, with a high estimate of 1,845.00p and a low estimate of 1,000.00p. As of October 20, the consensus forecast amongst 27 polled investment analysts covering the blue-chip group advises investors to hold their position in the company. 

WPP is scheduled to update investors on its third-quarter performance on Thursday.

As of 13:53 BST, Tuesday, 23 October, WPP PLC ORD 10P share price is 1,044.50p.

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