City broker Shore Capital has reduced its rating for WPP PLC (LON:WPP) to ‘hold’ from ‘buy’ following the advertising giant’s full-year results, although they called the FTSE 100-listed firm’s performance “robust”.
In a note to clients, Shore Capital’s analysts said: “We regard these results as reassuring given that they have been achieved against the backdrop of an unsettled macroeconomic and political uncertainty and resultant uncertainty over advertising spend.”
READ: WPP shares drop as advertising giant posts worst full-year performance since financial crisis
The analysts added: “We believe this robust performance is indicative of the strength of WPP’s underlying agencies, its proven ability to deliver a comprehensive service on a global basis and its long-standing ethos of investment and innovation to create and reinforce competitive advantage.
“We also believe these characteristics will stand it in good stead as it faces down new entrants in some areas of operation and responds to an industry-wide imperative to add demonstrable value to clients and help them navigate an increasing complex media landscape.”
But, they added: “That said, the short-term trading outlook appears challenging and we expect to trim our current year forecasts based on the headline guidance highlight above.
“We have therefore decided to moderate our recommendation from Buy to Hold following a period of improved share price performance.”
In lunchtime trading, WPP remained the top FTSE 100 faller with its shares down 14.1% at 1,497p.