AnalystConsensusTarget updated the narrative for WPP

WPP's analyst price targets have been revised downward, most notably to 510 GBp from 550 GBp, 360 GBp from 420 GBp, and $24 from $27, as analysts cite slower revenue growth expectations and ongoing restructuring challenges as reasons for the updates.

Analyst Commentary

Following the recent downward revisions in price targets for WPP, analysts shared both optimistic and cautious perspectives regarding the company’s prospects. Their views reflect a continued reassessment of WPP’s valuation, execution risks, and growth outlook in the face of industry challenges.

• Bullish analysts maintain a positive outlook on WPP shares and are keeping their Buy ratings despite lowering price targets, suggesting confidence in longer-term value recovery.
• Some believe that WPP’s ongoing restructuring efforts, while challenging, could ultimately position the company for improved operational efficiency and profitability once completed.
• Analysts see the current share price as reflective of near-term headwinds and note that this could present an attractive entry point should WPP’s growth stabilize.

• Bearish analysts express concerns about continued slowdowns in revenue growth and the ongoing impact of restructuring, which are likely to pressure margins and earnings in the short to medium term.
• There is an expectation of a cautious tone from WPP’s management in upcoming earnings calls, as persistent structural challenges could prolong the turnaround timeline.
• Reductions in future earnings estimates, especially for 2026 and 2027, highlight uncertainty regarding the pace of organic sales growth recovery.
• Some warn that recurring restructuring cycles could distract from strategic execution and limit upside potential in the company’s valuation.

What's in the News

• Japanese advertising firm Dentsu is evaluating the sale of its international business. This move could reshape the global competitive landscape for WPP and its peers (Financial Times).
• WPP revised its 2025 earnings guidance downward, now expecting like-for-like revenue growth of negative 5.5% to negative 6.0%, and a headline operating profit margin of about 13%.
• WPP announced the launch of WPP Open Pro, an AI-powered marketing platform designed to expand its market reach and deliver scalable campaign solutions for clients of all sizes.
• A class action lawsuit was filed against WPP and certain executives, alleging that the company misled investors regarding revenue outlook and growth prospects during restructuring efforts.
• The company reduced its interim dividend for the first half of 2025 to 7.5 pence per share, down from 15.0 pence per share in the prior year.

Valuation Changes

• Fair Value Estimate has declined from 4.41 to 3.72, indicating a reduced assessment of WPP’s intrinsic worth.
• Discount Rate has risen slightly from 10.06% to 10.79%, reflecting higher perceived risk in WPP’s outlook.
• Revenue Growth Expectations have dropped further from negative 14.07% to negative 15.23%, signaling greater anticipated contraction.
• Net Profit Margin projections have edged down from 5.53% to 5.44%.
• Future P/E Ratio has decreased from 12.66x to 11.54x, suggesting a lower valuation for WPP’s future earnings.