WPP PLC (LSE:WPP) shareholders hoping for a turnaround in 2025 may be left disappointed, according to a leading investment bank, which has kept its 'sell' rating on the advertising giant and lowered its price target from 580p to 520p.
UBS's latest update paints a gloomy picture. WPP missed first-quarter forecasts on organic growth, with net sales down 2.7%, slightly worse than expectations.
Management’s own commentary offered little optimism, suggesting that second-quarter trading will be just as weak. UBS now forecasts a full-year organic decline of 1.7% and has trimmed its earnings estimates for both 2025 and 2026.
While WPP’s valuation is not demanding (trades on around 7 times 2025 earnings with a dividend yield of 6%), UBS argues that softer US economic data and the upcoming Mars account review could add further pressure. Any loss of the Mars contract could hit 2026 earnings forecasts.
The agency group, which owns media buying giant GroupM and dozens of creative and public relations agencies, maintained its full-year guidance, but UBS questions whether the company can hit even the lower end of its targets without a clear recovery in client spending.
For UK investors, WPP remains a stock to watch closely, but the path to growth looks fraught.
The next few quarters could prove critical as market pressures, account shifts and foreign exchange headwinds all gather pace.
The marketing giant's shares were up 1% at 560.2p.