WPP (WPP) AI Stock Analysis

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WPP

(NYSE:WPP)

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Neutral 64 (OpenAI - 5.2)

Rating:64Neutral

Price Target:

$22.50

▲(1.81% Upside)

Action:ReiteratedDate:10/31/25

WPP's overall stock score is driven by a solid financial performance with strong cash flow and improved profitability, despite high leverage and declining revenue. The technical analysis indicates bearish momentum, suggesting caution. However, the attractive valuation with a low P/E ratio and high dividend yield provides a compelling case for value investors.

Positive Factors

Free cash flow strength

Sustained, strong free cash flow growth and high operating-cash-to-income ratios indicate WPP converts earnings to cash efficiently. This durable cash generation supports dividends, debt servicing, buybacks and reinvestment in capabilities, providing financial flexibility through cycles.

Margin improvement

Significant expansion in EBIT and net margins reflects improved operational efficiency and pricing or cost discipline. If sustained, higher margins boost returns on capital and provide internal funds for growth initiatives, making the business more resilient despite revenue pressures.

Diversified global business model

WPP's breadth across advertising, media buying, PR, digital and analytics gives scale, cross-sell opportunities and exposure to multiple demand drivers. Proprietary tech and large client relationships create structural advantages in retaining business and winning integrated mandates globally.

Negative Factors

High leverage

Elevated leverage and a low equity ratio limit financial flexibility and raise refinancing and interest-rate risks. High debt levels constrain capital allocation choices, increase vulnerability to downturns, and could pressure investment or dividend policies over the medium term.

Declining revenue trend

Slight but persistent revenue declines erode scale benefits and put pressure on top-line dependent margins. Maintaining recent margin gains will require stabilizing or reversing revenue trends through new client wins, pricing power, or higher-value services to sustain long-term profitability.

Major shareholder volatility

Material moves in large institutional stakes and frequent threshold filings signal changing ownership dynamics. Such volatility can lead to governance scrutiny, shifts in strategic priorities or capital-allocation pressures that create medium-term uncertainty around management's long-term plans.

WPP (WPP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.97B

Dividend Yield9.15%

Average Volume (3M)518.24K

Price to Earnings (P/E)8.1

Beta (1Y)0.73

Revenue Growth-1.89%

EPS Growth90.72%

CountryUS

Employees108,044

SectorCommunication Services

Sector Strength97

IndustryAdvertising Agencies

Share Statistics

EPS (TTM)N/A

Shares Outstanding215,760,470

10 Day Avg. Volume587,740

30 Day Avg. Volume518,244

Financial Highlights & Ratios

PEG Ratio0.04

Price to Book (P/B)2.55

Price to Sales (P/S)0.60

P/FCF Ratio7.55

Enterprise Value/Market Cap2.04

Enterprise Value/Revenue0.57

Enterprise Value/Gross Profit3.60

Enterprise Value/Ebitda5.34

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

EPS Forecast (FY)3.88

Revenue Forecast (FY)$13.09B

WPP Business Overview & Revenue Model

Company DescriptionWPP plc, a creative transformation company, provides communications, experience, commerce, and technology services in North America, the United Kingdom, Western Continental Europe, the Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe. The company operates through three segments: Global Integrated Agencies, Public Relations, and Specialist Agencies. It offers plans and creates marketing and branding campaigns; designs and produces advertisements across various media; and provides media buying services, such as strategy and business development, media investment, data and technology, and content. The company also offers public relations advisory services to clients who are seeking to communicate with a range of stakeholders from consumers to governments and the business and financial communities; and specialist agency services. WPP plc was founded in 1985 and is based in London, the United Kingdom.

How the Company Makes MoneyWPP generates revenue primarily through its diverse range of services offered to clients in various sectors. The company's revenue model is largely based on fees for services, which can include project-based fees, retainers, and commissions. Key revenue streams include advertising services, media buying, public relations, and digital marketing solutions. WPP also earns income from its proprietary technology platforms and data analytics capabilities that enhance client marketing effectiveness. Significant partnerships with major global brands and corporations across various industries contribute to its earnings, allowing WPP to leverage its expertise and scale to meet client needs.

WPP Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which might need strategic adjustments.

Chart InsightsWPP's Global Integrated Agencies segment shows a stable recovery post-2020, maintaining strong revenue levels despite slight fluctuations. Public Relations experienced a peak in 2022 but has seen a decline since, indicating potential challenges in maintaining growth. Specialist Agencies have stabilized after a significant drop in 2021, suggesting a strategic refocus. The absence of Data Investment Management revenue highlights a potential gap or strategic shift. Overall, WPP's revenue streams show resilience, but the company may need to address the declining momentum in Public Relations to sustain growth.

Data provided by:

The Fly

WPP Earnings Call Summary

Earnings Call Date:Feb 26, 2026

(Q4-2025)

Next Earnings Date:Jul 31, 2026

Earnings Call Sentiment Neutral

The call presented a balanced picture: clear near-term challenges including revenue decline (like-for-like -5.4% FY2025), margin compression (operating margin down 180 bps to 13%), EPS decline (-28.4%) and higher leverage (avg net debt/EBITDA 2.2x). Offsetting these are meaningful operational responses: strong new business momentum since Q4 2025 into 2026, an articulated Elevate28 strategy (targeting GBP 500m gross cost savings by 2028 and up to USD 900m white-space opportunity), major platform and partnership progress (WPP Open, InfoSum, Adobe partnership), an upgraded organizational model (4 operating units) and an investment-grade Fitch BBB rating with strong liquidity (GBP 4.4bn). Management acknowledges performance gaps and has laid out tangible cost, structural and growth actions; the plan will take time to move through phased delivery. Given the substantial near-term headwinds but credible remediation steps and some early upside from new business and platform differentiation, the overall tone is cautiously constructive but realistic about execution risk and timing.

Q4-2025 Updates

Positive Updates

Strong New Business Momentum

WPP was #1 in JPMorgan's net new business rankings in Q4 2025 (first time since 2020) with major wins across media, creative and integrated offers including the U.K. government lead media, Reckitt, Henkel, Kenvue, Haleon, TruGreen, Norwegian Cruise Line and Suncor; momentum continued into 2026 with Jaguar Land Rover (Global Media and Integrated Services). Management stated that the impact of 2026 new business already exceeds the impact of all 2025 wins as of February 2026.

WPP Open and Technology Partnerships

WPP Open (agentic marketing platform) and Open Intelligence are positioned as a competitive differentiator; integrated use cases (e.g., Google Pixel campaign) produced a 3% brand uplift with assets live in 24 hours. Strategic partnerships include Google, Microsoft, TikTok, Meta, Amazon, Stability AI and an expanded Adobe integration. Group invested over GBP 300 million in tech/data/AI in 2025.

Creation and Positioning of New Operating Units

Strategic restructuring to a single-company model with 4 operating units and 4 regions, plus new units: WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions — intended to simplify client navigation, improve cross-sell and align incentives across the firm.

WPP Enterprise Solutions Scale

Enterprise Solutions elevated as a distinct unit: ~10,000 employees and ~USD 1.8 billion revenue (~13% of group net revenue) positioned to capture transformation/enterprise services in a market cited at USD 230 billion with ~7% CAGR.

Production and Creative Reorganization

Launched WPP Production (centralized high-velocity GenAI and virtual production capabilities) and WPP Creative (unite iconic agency brands without merging) to capture high-growth content production (high-velocity content cited with 38% CAGR) and improve operational cost base and cross-selling.

Clear Cost Savings and Reinvestment Plan

Target to unlock GBP 500 million of gross annual cost savings by 2028; 2026 expects at least GBP 100 million of in-year P&L savings and GBP 250 million annualized, with all in-year savings to be reinvested into growth priorities (media, production, enterprise solutions).

Cash Flow and Liquidity Strength

Adjusted operating cash flow before working capital was GBP 1.2 billion (top of prior guidance range). Liquidity as of December 2025 was GBP 4.4 billion, including an undrawn committed RCF of USD 2.5 billion (maturing 2031). The company completed a successful GBP 1 billion bond issue in December 2025.

Investment-Grade Rating and Capital Framework

Fitch assigned a BBB rating with a stable outlook in December 2025. Management committed to maintaining an investment-grade balance sheet, funding growth from cost initiatives, focusing on disciplined M&A and maintaining shareholder returns (2025 dividend of 15p).

Headcount and Cost Base Reductions Achieved

Permanent headcount reduced 8.7% year-on-year and freelancer usage down 14%; staff costs reduced by GBP 576 million, staff incentive payments reduced 50% to GBP 182 million, contributing to margin management while enabling reinvestment into growth areas.

Negative Updates

Revenue Decline and Deteriorating Trends

Like-for-like revenue less pass-through costs fell 5.4% for FY2025 (Q4 like-for-like decline of 6.9%, worsening from Q3 decline of 5.9%). Reported revenue less pass-through costs was GBP 10.2 billion, down 10.4% year-on-year on a reported basis.

Margin and Profitability Pressure

Headline operating margin declined to 13.0% (down 180 basis points year-on-year on a like-for-like basis). Headline operating profit was GBP 1.3 billion, down 22.6% year-on-year on a reported basis.

Earnings and Tax Headwinds

Headline diluted EPS was 63.2p, a decline of 28.4% year-on-year. Headline effective tax rate increased to 32%, amplifying the EPS impact given the lower profit base.

Client Losses and New Business Lag

Gross client losses deteriorated through 2025 and were a major negative driver (management expects gross client losses to represent a 500–600 basis point drag on like-for-like in 2026 vs 300–400 basis points in 2025). Aggregate in-year wins were lower than expected in 2025 and pitch activity was down double digits globally, meaning net new business headwinds likely to persist into H1 2026.

Sector and Regional Spending Weakness

Client spending was cautious and volatile, hitting CPG, automotive and tech/digital services most strongly; Ogilvy was noted as especially impacted by reduced spend and project cuts.

Balance Sheet and Leverage Movements

Spot net debt increased to GBP 2.2 billion (up ~GBP 500 million year-on-year). Average adjusted net debt modestly down to GBP 3.4 billion, but average adjusted net debt to headline EBITDA rose to 2.2x from 1.8x in 2024; management expects average leverage metrics to move up further in 2026 given moderated headline EBITDA.

Working Capital and Cash Conversion Pressure

Working capital saw an outflow of GBP 334 million (driven by lower staff incentives, adverse FX and mix). Adjusted free cash flow was GBP 202 million, with tax including GBP 43 million one-off taxes related to disposal of FGS Global.

Restructuring and Impairment Charges

Noncash goodwill impairments of GBP 641 million (primarily integrated creative agencies) and property impairments of GBP 114 million were recorded. Cash restructuring and associated costs: GBP 82 million incurred in 2025; anticipated cash restructuring charges ~GBP 400 million across 2026–27 (GBP 250 million anticipated in 2026 guidance, ~GBP 190 million tied to Elevate28).

Short-Term Guidance Indicates Continued Pressure

2026 guidance expects mid- to high single-digit like-for-like declines in H1 with improvement in H2, and headline operating margin guidance of 12%–13% for 2026 — implying continued near-term margin compression while investments and incentive rebuild occur.

Company Guidance

Guidance for 2026: WPP expects like‑for‑like net revenue less pass‑through costs to be down mid‑ to high‑single digits in H1 with a progressively improving trajectory in H2 (Q1 the weakest), with gross client losses dragging ~500–600bp (up from 300–400bp in 2025) even as gross client wins already exceed full‑year 2025; headline operating margin is guided to 12–13%. Cash guidance is adjusted operating cash flow before working capital of GBP 800–900m (including total anticipated cash restructuring charges of ~GBP 250m, ~GBP 190m of which relate to Elevate28) — excluding those charges AOCF would be c. GBP 1.0–1.1bn. Management targets at least GBP 100m of in‑year P&L savings in 2026, GBP 250m of annualized savings in 2026, and GBP 500m of gross annual cost savings by 2028 (restructuring cash costs c. GBP 400m across 2026–27); they expect average net debt to remain broadly stable but average leverage to rise in 2026 from 2025’s 2.2x average adjusted net debt/EBITDA (average adjusted net debt £3.4bn; year‑end net debt £2.2bn), with £4.4bn liquidity and a Fitch BBB (stable) rating.

WPP Financial Statement Overview

Summary

WPP's financial performance shows improved profitability and cash flow generation, despite a slight decline in revenue. The company has enhanced its operational efficiency as shown by the improved margins. However, high leverage remains a concern, which could pose risks in volatile market conditions. The strong cash flow position provides a cushion, but maintaining revenue growth will be crucial for future stability.

Income Statement

Positive

The income statement shows a mixed performance. The gross profit margin for 2024 was 16.63%, indicating a solid ability to cover production costs. The net profit margin improved to 3.68% from 0.74% in 2023, showing enhanced profitability. However, the revenue growth rate was -0.70%, indicating a slight decline in total revenue relative to the previous year. EBIT margin improved significantly to 8.99% from 3.58% in 2023, suggesting better operational efficiency. EBITDA margin decreased slightly to 10.76% from 12.86% in 2023.

Balance Sheet

Positive

The balance sheet highlights some strengths and challenges. The debt-to-equity ratio increased to 1.83 from 2.04 in 2023, suggesting a high level of leverage, which can be risky. Return on equity (ROE) improved to 15.60% from 3.27% in 2023, indicating better profitability for shareholders. The equity ratio stands at 13.62%, slightly better than the previous year, but still suggests heavy reliance on debt financing.

Cash Flow

Positive

Cash flow statements reveal strong free cash flow growth of 19.41%, indicating improved cash generation capabilities. The operating cash flow to net income ratio was 2.60, demonstrating robust operating cash flow relative to net income. The free cash flow to net income ratio was 2.25, further emphasizing strong cash flow performance compared to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.18B	14.74B	14.84B	14.43B	12.80B	12.00B
Gross Profit	2.25B	2.45B	2.52B	2.54B	2.20B	2.01B
EBITDA	1.51B	1.90B	1.91B	2.03B	1.78B	-1.85B
Net Income	381.00M	542.00M	110.40M	682.70M	637.70M	-2.97B
Balance Sheet
Total Assets	23.39B	25.51B	26.62B	28.82B	27.87B	36.17B
Cash, Cash Equivalents and Short-Term Investments	1.44B	2.64B	2.22B	2.49B	3.88B	12.90B
Total Debt	6.75B	6.35B	6.88B	7.18B	6.83B	15.75B
Total Liabilities	19.99B	21.77B	22.79B	24.66B	23.80B	31.12B
Stockholders Equity	3.16B	3.48B	3.38B	3.68B	3.62B	4.73B
Cash Flow
Free Cash Flow	763.00M	1.17B	1.02B	477.60M	1.74B	1.78B
Operating Cash Flow	912.00M	1.41B	1.24B	700.90M	2.03B	2.05B
Investing Cash Flow	102.00M	278.00M	-380.40M	-408.90M	-638.40M	-163.40M
Financing Cash Flow	-1.73B	-989.00M	-904.70M	-1.91B	-2.06B	-250.50M

WPP Technical Analysis

Technical Analysis Sentiment

Negative

Last Price22.10

Price Trends

50DMA

20.88

Negative

100DMA

21.03

Negative

200DMA

25.59

Negative

Market Momentum

MACD

-0.66

Negative

RSI

44.75

Neutral

STOCH

58.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WPP, the sentiment is Negative. The current price of 22.1 is above the 20-day moving average (MA) of 18.87, above the 50-day MA of 20.88, and below the 200-day MA of 25.59, indicating a bearish trend. The MACD of -0.66 indicates Negative momentum. The RSI at 44.75 is Neutral, neither overbought nor oversold. The STOCH value of 58.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WPP.

WPP Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGNI	67 Neutral	$1.68B	31.75	7.56%	―	6.27%	226.16%
STGW	65 Neutral	$1.14B	59.19	3.80%	―	6.76%	1841.46%
WPP	64 Neutral	$3.97B	8.09	11.24%	9.15%	-1.89%	90.72%
OMC	62 Neutral	$25.59B	166.65	-0.67%	3.68%	4.13%	-7.84%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
ZD	60 Neutral	$1.05B	24.25	2.66%	―	5.70%	97.88%

* Communication Services Sector Average

Performance Comparison

WPP

18.73

-19.81

-51.40%

Ziff Davis

26.84

-14.47

-35.03%

STGW

Stagwell

4.54

-1.82

-28.62%

OMC

Omnicom Group

82.71

3.91

4.96%

MGNI

Magnite

11.97

-4.58

-27.67%

WPP Corporate Events

WPP Discloses BlackRock’s Voting Stake Reaches 10% After Early January Transactions

Jan 6, 2026

On 6 January 2026, WPP disclosed a notification of major holdings showing that BlackRock, Inc. had crossed a reporting threshold in the company’s shares on 2 January 2026, following an acquisition or disposal of voting rights and related financial instruments. The filing indicates that BlackRock now holds a total of 10.0% of WPP’s voting rights, comprising 8.15% through shares and 1.85% via financial instruments, up from a previous combined position of 9.93%. This incremental change confirms BlackRock’s status as a significant institutional shareholder in WPP and underlines continuing large-scale asset manager interest in the group’s equity, a factor closely watched by investors for signals about confidence in WPP’s strategic direction and valuation.