Liberum reckons that there is potential for a ‘major re-rating’ at advertising giant WPP (LON:WPP), Citywire has reported. The comments follow the FTSE 100 group’s half-year results last week which pointed to a slower rate of decline in the company’s North American market.
WPP’s share price has been steady in London this Tuesday, having gained 0.45 percent to 975.40p as of 10:11 BST. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into negative territory and currently standing 0.50 percent lower at 7,190.27 points.
Liberum weighs in on WPP
Liberum reaffirmed its ‘buy’ rating on WPP and 1,450p target on the share price following the ad giant’s results.
“While this is still obviously a business in decline, we fundamentally do not believe that the agency model is broken, more than WPP has to readjust itself to the changes that have occurred and reduce its reliance on the traditional media business to drive profits,” the broker’s analyst Ian Whittaker commented, as quoted by Citywire. The comments come amid the ongoing overhaul of the business under new chief executive Mark read.
Hargreaves Lansdown meanwhile commented in a note in the wake of WPP’s results that it needed to see “more signs of progress before we can become confident the group can sustain or grow that payment longer term”. The Financial Times meanwhile quoted Thomas Singlehurst, a media analyst at Citigroup, as saying that the market was more likely to respond to better than expected revenues rather than falling profits as analysts believed sales had “permanently diverged from peers”.
Analyst ratings update
Goldman Sachs reaffirmed the FTSE 100 company as a ‘buy’ today, without specifying a target on the WPP share price, while yesterday, Barclays had reaffirmed the group as an ‘overweight,’ valuing the shares at 1,100p. According to MarketBeat, the blue-chip advertising group currently has a consensus ‘hold’ rating and an average price target of 1,104.64p.