WPP: Invest Securities downgrades to 'Neutral'.
(CercleFinance.com) - WPP has made just too many profit warnings according to Invest Securities.
In its report issued on Thursday morning, the broker downgraded its "buy" rating to "neutral" and reduced its target price for the share to 15 pounds, cut from 19.9 pounds previously.
Invest Securities said that after WPP reduced its like-for-like estimate for growth in its 2017 gross profit to +2% in March, from +3% last December, its announcement of yet another revision, with forecast growth currently between 0% and 1%, has shaken the market's confidence in the resilience of WPP's business model.
Furthermore, the "official" argument, i.e. the pressure from FMCG groups and losing budgets in 2016, does not fully convince the analyst, who says that this warning may also be linked to an overly fragmented structure that makes it difficult to implement the concept of horizontality, which has now become the group's main strategic aim.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
In its report issued on Thursday morning, the broker downgraded its "buy" rating to "neutral" and reduced its target price for the share to 15 pounds, cut from 19.9 pounds previously.
Invest Securities said that after WPP reduced its like-for-like estimate for growth in its 2017 gross profit to +2% in March, from +3% last December, its announcement of yet another revision, with forecast growth currently between 0% and 1%, has shaken the market's confidence in the resilience of WPP's business model.
Furthermore, the "official" argument, i.e. the pressure from FMCG groups and losing budgets in 2016, does not fully convince the analyst, who says that this warning may also be linked to an overly fragmented structure that makes it difficult to implement the concept of horizontality, which has now become the group's main strategic aim.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.