WPP PLC (LSE:WPP) shares bounced 1.7% to 436p on Thursday after the advertising giant appointed a new CEO, a day after issuing a profit warning.
The FTSE 100 group, which had seen its shares plummet 19% the previous day, helped limit further losses by announcing a new chief executive, Cindy Rose, who brings decades of experience from Microsoft, Disney and Vodafone.
Analysts said her previous roles meant she is well versed with the fast-moving world of technology and consumer trends, just as the advertising market faces a potentially pivotal structural change from the rise of 'agentic' artificial intelligence.
"Investors should be encouraged by WPP hiring an outsider," said analysts at AJ Bell. "There was always the danger of not being able to find the right candidate brave enough to lead a turnaround; and having to promote from within just to have someone behind the wheel.
"Fresh thinking is of paramount importance and Rose needs to have a bag full of ideas as soon as she takes office as there is a massive recovery job at hand."
Meanwhile, investment banks such as UBS and Deutsche Bank were downgraded their earnings forecasts, following the trading update yesterday where WPP said it expects net revenue to decline between 3% and 5%, compared with its previous guidance of flat to a 2% decline. Operating margins are now expected to contract by 50 to 175 basis points.
Deutsche cut its share price target from 740p to 550p, but still kept its 'buy' rating as this was above the last close price of 428.6p.
Analyst Steve Liechti noted the deterioration in second quarter trading, particularly June, seemed to be driven by three elements, including one-offs such as lower accrued revenue, but also more cautious client spend given tough macroeconomic conditions.
The third factor was lower net new biz wins, with pitches at a third of 2024 levels with a conversion rate similar, excluding the Media arm, which was hit by a focus on rationalisation versus execution.
The "large" loss of the Mars account loss is now expected to hit from the fourth quarter of the year, rather than early in 2026 as expected before.
Similarly, UBS cut its earnings per share estimates for this year and next by 9% to 10%, and lowered its price target from 485p to 410p and reiterated its ‘sell’ rating.
UBS analysts flagged further downside risk, including the potential for a dividend cut in 2026.