Interpublic Group price target lowered to $25.60 by UBS on AI impact

Investing.com - UBS lowered its price target on Interpublic Group (NYSE:IPG) to $25.60 from $27.00 on Wednesday, while maintaining a Neutral rating on the advertising company’s stock. According to InvestingPro analysis, IPG appears undervalued at its current price of $26.03, with the company maintaining a GOOD financial health score.

The firm noted that Interpublic Group has strongly defended how its AI-driven product innovation is helping performance in pitches. Based on year-to-date performance, the company expects net wins to be a tailwind in 2026 and indicated it is in the final round for several major ongoing pitches. InvestingPro data shows the company remains profitable with a 22.5% gross profit margin, while maintaining its impressive 12-year streak of dividend increases.

Interpublic Group reiterated its 2025 guidance for organic growth of -1% to -2%, projecting that the second half of the year will be broadly flat. This expectation is driven by further acceleration in underlying growth excluding losses, which were 0.8% in Q1 and 2.0% in Q2, alongside a smaller impact from account losses.

UBS highlighted that Interpublic Group will fully lap its Pfizer (NYSE:PFE) account loss in Q3 and Amazon (NASDAQ:AMZN) in Q4, marking the end of these significant headwinds.

The advertising firm has committed to margin expansion in 2025 "north of 100bps" as it delivers approximately $300 million in cost savings during the year, with additional cost savings expected in 2026.

In other recent news, Interpublic Group reported impressive Q2 2025 earnings, with earnings per share (EPS) reaching $0.75, significantly exceeding the forecast of $0.5617 by 33.52%. The company’s revenue for the quarter stood at $2.17 billion, aligning with market expectations. Additionally, Interpublic unveiled an AI-powered system called Agentic Systems for Commerce (ASC), aimed at enhancing brand performance in digital commerce. This new offering utilizes technology from Intelligence Node, a company Interpublic acquired earlier this year. Dr. Jeriad Zoghby, who joined from Accenture (NYSE:ACN) in 2023, will lead ASC as Chief Commerce Strategy Officer. These developments reflect Interpublic’s strategic focus on integrating advanced technology to bolster its services. While no specific analyst upgrades or downgrades were mentioned, the positive earnings results and new initiatives highlight the company’s ongoing growth efforts.

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