Analysts at Morgan Stanley downgraded Interpublic Group (NYSE: IPG) on Monday, citing a persisting lack of growth for the advertising company in the coming years.
Morgan Stanley stressed the fact that recent account losses, particularly Amazon’s media account, and further softness in its R/GA and Huge brands, among other risks, might continue into 2024 and 2025. They downgraded the stock to “underweight” from a previous investment rating of equal-weight” and cut the price target by $6 to $28, implying a nearly 6% downside.
“We estimate recent account losses, and continued pressure from IPG’s digital specialty agencies, creates risk to ’25 consensus expectations. It also suggests ’25 could be the fourth straight year of flat to LSD adj. EBITA growth, limiting potential multiple expansion,” Morgan Stanley analysts wrote in a July 22 report.
“While we are constructive on the broader advertising market, IPG’s recent market share loss and lack of both operating and financial leverage suggests less upside in a cyclical bull case than our broader advertising coverage,” MS analysts added. They expect diluted EPS to decline by 7% this year and grow by 4% in 2025 for the company.
IPG was down a little over 1% in session on Monday, and the stock is down over 10% YTD as of last close.
Source: http://seekingalpha.com/news/4126340-morgan-stanley-lowers-rating-on-ipg-on-growing-risk-of-tepid-growth#source=first_level_url%3Amarket-news%7Csection_asset%3Amain
Footnotes:
– http://seekingalpha.com/symbol/IPG
In the above article, the only external URL found is related to the stock symbol for Interpublic Group (IPG) on Seeking Alpha’s website.
