WPP share price surges despite revenue drop

Shares in WPP (LON:WPP) have climbed higher even as the advertising giant posted a fall in revenue for the first three months of the year. The company, which has been undergoing a turnaround following the departure of founder and CEO Martin Sorrell last year, however, reaffirmed its full-year guidance.

As of 12:50 BST, the WPP share price had added up 3.75 percent to 940.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.22 percent lower at 7,417.41 points. The group’s shares have given up more than 16 percent of their value over the past year, as compared with a largely flat Footsie.

WPP posts revenue drop

WPP announced in a statement today that its reported revenue had inched 0.9 percent higher in the first quarter of the year. The group’s like-for-like revenue less pass-through costs, however, dipped 2.8 percent during the reported period, with the decline reflecting client assignment losses last year.

“As anticipated, our first quarter trading update reflects the impact of certain significant client losses in 2018, in particular in the United States,” WPP’s new chief executive Mark Read commented in the statement. “Although we face a challenging year, especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction.”

Read further noted that the group’s expectations for the full year remained unchanged. Earlier this year, the ad giant reported that its 2018 had come in at the upper end of its guidance.

Analysts on ad giant

The 22 analysts offering 12-month targets for the WPP share price have a median target of 1,000.00p, with a high estimate of 1,520.00p and a low estimate of 800.00p. As of April 19, the consensus forecast amongst 25 polled investment analysts covering the blue-chip group has it that the company will outperform the market.