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Investing.com - Morgan Stanley (NYSE:MS) has lowered its price target on WPP Plc (LON:WPP) (NYSE:WPP) to GBP5.75 from GBP6.35 while maintaining an Equalweight rating on the stock. The advertising giant’s shares currently trade at $29.62, near their 52-week low, with a P/E ratio of 8.68 and a notable dividend yield of 9.14%.
The price target reduction follows WPP’s profit warning for the second quarter and the company’s lowered guidance for 2025.
Morgan Stanley now forecasts approximately -4.5% organic net revenue growth for WPP in 2025, down from its previous estimate of -2%.
The firm also projects an adjusted EBIT margin of 14% for the advertising giant, representing a one percentage point year-over-year decline.
Morgan Stanley’s adjusted earnings per share forecast for WPP has been reduced by approximately 9% for the 2025-2027 period.
In other recent news, WPP Plc has experienced a downgrade from CFRA following a reduction in its 2025 guidance and the announcement of its CEO’s impending departure. The company now anticipates a decline in like-for-like net sales by 3% to 5%, a significant revision from its prior forecast of flat to -2% growth. Additionally, WPP projects a compression of its headline operating margin by 50 to 175 basis points, diverging from its earlier guidance of remaining "around flat." These revised forecasts fall short of consensus expectations, which had predicted a 1.7% net sales decline and a mere 10 basis point margin contraction. CFRA attributes this weaker outlook to an "accelerating client pullback and reduced support from net new business." The research firm expressed concern about the timing of the CEO’s departure, scheduled for the end of 2025, describing it as a "dual crisis of performance and leadership." While CFRA acknowledges that WPP’s profitability guidance appears realistic due to cost-cutting measures, it warns that the company remains vulnerable with limited ability to capitalize on any industry recovery until leadership stability is restored.
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