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Investing.com - Wells Fargo upgraded Omnicom Group (NYSE:OMC) from Equal Weight to Overweight on Tuesday, raising its price target to $91.00 from $78.00. The stock, currently trading at $74.53, appears undervalued according to InvestingPro analysis, with a P/E ratio of 10.66 and an attractive dividend yield of 3.76%.
The upgrade comes as Omnicom approaches the completion of its merger with Interpublic Group (IPG), with Wells Fargo noting the stock has declined 28% since the deal announcement while the S&P 500 gained 10% during the same period.
Wells Fargo cited a "compelling" upside/downside ratio for Omnicom shares, which are currently trading at less than 8 times the firm’s projected pro forma earnings per share.
The firm conducted a comprehensive analysis of industry changes in media, creative, and artificial intelligence, concluding that while both risks and opportunities exist, Omnicom is likely to maintain stable organic growth.
Wells Fargo acknowledged that disintermediation fears have affected agency stocks for over a decade, with AI representing the latest challenge, but determined that Omnicom’s growth outlook is more stable than its current valuation suggests.
In other recent news, Omnicom Group reported its second-quarter 2025 earnings, surpassing Wall Street expectations. The company achieved an earnings per share of $2.05, slightly above the forecasted $2.02, and reported revenue of $4.02 billion, exceeding the anticipated $3.97 billion. Additionally, Omnicom has announced a quarterly dividend of 70 cents per share, payable on October 10, 2025, to shareholders of record as of September 2, 2025. In merger news, Omnicom’s $13.25 billion merger with Interpublic Group has cleared significant regulatory hurdles, with approvals from both the UK’s competition regulator and the Australian Competition and Consumer Commission. This merger is set to create the world’s largest advertising agency. Furthermore, Omnicom has been appointed by OpenAI as its global media agency of record, indicating an expansion in OpenAI’s marketing efforts. These developments highlight Omnicom’s strategic growth and partnerships in the industry.
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