This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Bullish turnaround by shares offers chance of retracing September decline. Attractive 5% dividend yield. The company is seeing renewed optimism now that long term CEO Sir Martin Sorrell has left. There are hopes of disposals, allowing the group to concentrate on better performing businesses.
Risks to WPP include the new CEO (execution risk), even if he was an internal promotion. A global economic slowdown could exacerbate any drop in media spend (Q2 results suggested US weakness). An equity market drop that favours more defensive shares could hurt along with broker downgrades.
Brokers/analysts are bullish on the shares with only 19% suggesting Sell. This is supported by 75% of broker price targets suggesting upside from current levels, to a consensus target of 1390p, well above our target of revisiting their en-Aug peak of 1320p.
Next Event: Ex-div (22.7p/1.9%), 4 Oct; Q3 Trading Statement, Oct
Latest Broker 12-Month Consensus: 37% Buy, 44% Hold, 19% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | -8.4 | -3.2 | -4.0 | -3.3 | -16.1 | -35.3 | -12.5 | -9.5 | -6.3 |
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Prepared by Michael van Dulken, Head of Research