WPP PLC faces further earnings pressure in 2026 despite a new medium-term growth plan, according to Deutsche Bank, which has cut its price target to 425p from 510p while retaining a 'buy' rating.
Following the group’s full year 2025 results and strategy update last week, analyst Steve Liechti said new chief executive Cindy Rose’s 'Elevate28' plan offers a clearer path to mid-term growth, which is positive for a “lowly rated stock with market sentiment at a low”.
However, a tough first half of the 2026 financial year is expected, with consensus downgrades likely.
Like-for-like revenue is forecast by Liechti to fall 5.9% this year, compared with a previous estimate for a 3.5% drop.
Adjusted operating margin is now seen at 12.1%, down from 12.5% previously, towards the lower end of company guidance of 12% to 13%.
The analyst cut his adjusted earnings per share forecast 10% to 50.1p (versus 63.2p last year and 88p in 2024), reflecting the further revenue pressure and full reinvestment of £100 million of cost savings.