Market News & Analysis
WPP returns to sales growth
Fiona Cincotta October 25, 2019 6:36 PM
- Sales £3.29 billion +5.2%
- LFL revenue climbed 1.9% (excluding Kantar)
- US biggest source revenue £1.24 billion +3.8%
- UK revenue £468 million +1.48%
- Europe revenue £613 million +4.1%
WPP has had a tough few years. Shares shed 50% of their value from 2017 – 19 as WPP lost big clients such a Ford and American Express and as big ad agencies suffer from stiff competition from the likes of Google and Facebook. Add into the mix the fact that marketing budgets are being hit by ongoing global growth uncertainties and today’s return to quarterly organic sales growth for the first time in over a year looks all the more impressive.
A new strategy and more streamlined approach from boss Mark Read is clearly helping the advertising giant attract talent and win contracts, picking up clients such as eBay and Mondelez.
An air of caution remains
It is still early days, let’s not forget that WPP had a less than impressive H1. It appears that WPP is on the right path, however it remains cautious in its 2019 outlook, deciding not to move up guidance at this stage. Expectations for 2020 could be a good deal higher. There are tentative signs that WPP is following in the footsteps of it stronger performing US peers, rather than French rival Publicis which slashed its sales outlook earlier this month.
Sentiment towards WPP is on the up. According to data from Refintiv, 24 recommendations are split:
- 3 Strong buy
- 8 Buy
- 10 Hold
- 3 Sell
WPP traded between 800p – 900p for the first 4 months on the year. In April the share price started advancing, hitting a high of 1047p mid-September. Following today’s results, the share price has jumped over 5% pushing back over the 200 sma. We are looking for a break above 1017p to confirm a more bullish trend. Support can be seen at 930p prior to 900p.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.