18th January 2016
The New Year has witnessed brokers come out in force to back advertising giant WPP with the market consensus now pushing the stock into ‘strong buy’ territory.
As the bellwether of the advertising industry, WPP is widely regarded as a global economic barometer.
The company offers a wide range of exposure to both digital media and global markets and there has been steady progress in emerging markets, with around 30% of revenue now coming from these countries.
The past year has witnessed its stock rise by 4% although over six months they are down by almost 6%.
But January, has witnessed analysts at Investec, Bernstein and Exane BNP Paribas all reiterate positive updates on the FTSE 100 constituent.
Graham Spooner, investment research analyst at stockbroker The Share Centre is the latest stockbroker to raise his hand in support of the group.
He highlighted that recent trading updates have been solid, “despite a warning from the group that clients are becoming more cautious”.
He said: “October highlighted a good performance at its North American operations, and at that point, guidance for the full year was reaffirmed.
“There was also news in November of WPP’s acquisition of a majority stake in Essence Digital, a buyer of digital media.
“Interested investors should appreciate that new technology should help open up avenues for growth over the longer term and this is reflected in new media related business being WPP’s fastest growing area.”
In addition, he asserted that given 2016 will see the US elections, Olympics and European football – together “could give the business a boost”.
Spooner said: “The growing importance of emerging markets and digital media to the company looks set to continue, allied to improving dividends, earnings momentum and a steady flow of acquisitions. Subsequently, we recommend WPP as a ‘buy’ for medium risk investors seeking a balanced portfolio.”