Barclays downgrades WPP stock rating on management change concerns

Published 25/06/2025, 06:54
© Reuters.

Investing.com - Barclays (LON:BARC) downgraded WPP Plc (NYSE:WPP) stock rating from Equalweight to Underweight on Monday, while reducing its price target to GBP5.50 from GBP7.00.

The downgrade comes despite WPP’s significant underperformance year-to-date, with shares down 44% compared to the DJSTOXX600, resulting in what Barclays describes as an "inexpensive" valuation at 7x 2025 estimated P/E ratio.

Barclays cited several factors for the downgrade, including uncertainties created by management changes, noting that media stocks with new CEOs typically underperform by 10% between the CEO change announcement and the unveiling of the new strategy.

The firm also expressed concern about WPP defending $1.4 billion in media billings, warning the company is "likely to lose some of that based on recent track record," with a worst-case scenario potentially impacting organic growth.

Additional factors behind the downgrade include WPP’s warning about first-half margins falling below last year’s levels and Barclays’ estimates being 2-3% below consensus for fiscal year 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.