IPG
Interpublic Group of Companies Inc
Consumer, TMT
01/30/2018
Presented
| Date | 01/26/2018 |
| Price | $21.91 |
| Market Cap | $8.70B |
| Ent Value | $9.92B |
| P/E Ratio | 15.22x |
| Book Value | $5.18 |
| Div Yield | 3.29% |
| Shares O/S | 397.20M |
| Ave Daily Vol | 5,405,439 |
| Short Int | 6.81% |
Current
| Price | $31.63 |
| Market Cap | $11.88B |
| Interpublic Group of Cos., Inc. provides marketing and business services. It specializes in consumer advertising, digital marketing, communications planning and media buying, public relations and specialized communications disciplines. The company has three global networks, McCann Worldgroup, Foote, Cone & Belding and MullenLowe Group, which provide integrated, large-scale advertising and marketing solutions for clients. Its global media services companies include UM and Initiative, which operate under the IPG Mediabrands umbrella. It operates its business through two segments: Integrated Agency Network and Constituency Management Group. The Integrated Agency Network segment is comprised of Draftfcb, Lowe, McCann, Media agencies and Stand-alone agencies. The Constituency Management Group segment includes Weber Shandwick, FutureBrand, DeVries, GolinHarris, Jack Morton, and Octagon Worldwide. It provides clients with diversified services, including public relations, meeting and event production, sports and entertainment marketing, corporate and brand identity and strategic marketing consulting. The company was formerly known as McCann-Erickson, Inc. and changed its name The Interpublic Group of Co., Inc. in January 1961. Interpublic was founded on September 18, 1930 and is headquartered in New York, NY. |
Publicly traded companies mentioned herein: Accenture PLC (ACN), Amazon.com Inc (AMZN), Interpublic Group of Cos Inc (IPG), Omnicom Group Inc (OMC), Procter & Gamble Co (PG), Publicis Groupe SA (PUB FP), WPP plc (WPP LN, WPPGY)
Highlights
Over the past two months, the presenter has observed five Street downgrades to “Sell” across the publicly traded advertising agencies. Over the 12 years he’s been watching the agencies, he said he has, “Never seen such a race to take organic growth estimates down”. In his opinion, bears on IPG, WPP, and OMC may be missing the big picture, and are too focused on the recent past. Yes, Amazon poses a risk; and yes, the P&G announcement that it is consolidating agencies and bringing media planning (and buying) in-house may lead to further fee/ revenue pressure. However, the ad agency stocks have been trading well recently, and he likes the risk/ reward on IPG and OMC shares at ~$21 and ~$77, respectively. He is long at this time, and for IPG he is modeling $2 of EPS in 2019. This is ~$0.25 - $0.30 ahead of Street estimates, and assuming the stock can maintain a 14x - 15x multiple the 12-month price target range is $28 - $30.
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