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WPP plc (WPP)
NYSE:WPP
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WPP
(NYSE:WPP)
Rating:66Neutral
Price Target:
$32.00
▲(14.98%Upside)
WPP (WPP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.06B
Dividend Yield11.91%
Average Volume (3M)522.25K
Price to Earnings (P/E)8.7
Beta (1Y)0.87
Revenue Growth2.07%
EPS Growth407.27%
CountryUS
Employees108,044
SectorCommunication Services
Sector Strength83
IndustryAdvertising Agencies
Share Statistics
EPS (TTM)3.66
Shares Outstanding215,760,470
10 Day Avg. Volume867,844
30 Day Avg. Volume522,245
Financial Highlights & Ratios
PEG Ratio3.85
Price to Book (P/B)12.12
Price to Sales (P/S)0.00
P/FCF Ratio93.42
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$37.00Price Target Upside32.95% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
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 makes money primarily through fee-based services offered by its network of agencies. The company earns revenue from providing strategic consulting, creative services, media planning and buying, data analytics, and digital marketing solutions to a broad range of clients across industries such as consumer goods, technology, healthcare, and financial services. WPP's revenue model includes commissions on media placements, fixed fees for specific projects, and performance-based incentives tied to the success of marketing campaigns. Key revenue streams include advertising services, media investment management, and public relations. Additionally, WPP has formed significant partnerships and alliances with technology companies to leverage data and analytics, further enhancing its service offerings and contributing to its earnings.
WPP Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which might need strategic adjustments.
Shows how revenue is distributed across different business segments, highlighting which areas are driving growth and which might need strategic adjustments.
Data provided by:
Main Street Data
Main Street DataWPP Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q4-2024)
| % Change Since: -40.38%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted improvements in operating margin, debt reduction, and strategic transformation progress. However, it also acknowledged challenges in net revenue decline, significant issues in the China market, and increased finance costs. The cautious guidance for 2025 reflects ongoing uncertainty in macroeconomic conditions.Q4-2024 Updates
Positive Updates
Operating Margin Improvement
Headline operating margin improved to 15%, up 40 basis points year-on-year, benefiting from structural cost savings and disciplined cost management.
Debt Reduction
Year-end net debt was reduced to GBP 1.7 billion, a GBP 0.8 billion reduction year-on-year, aided by strong working capital management and the sale of FGS Global.
Strategic Transformation Progress
Significant progress in strategic transformation, including network consolidation, simplification, and investment in WPP Open, AI, and data.
Top Client Growth
Top 10 clients grew by 2.8%, and the top 25 clients grew by 2%, indicating solid client relationship management and growth.
AI and Technology Investment
Increased investment in AI and technology, with WPP Open seeing greater adoption and a planned GBP 50 million incremental cash spend in 2025.
Negative Updates
Net Revenue Decline
Net revenue growth was at minus 1%, at the lower end of the guidance range, impacted by challenging trends in China and weaker discretionary spend.
China Market Challenges
China experienced a 20.8% decline in 2024, with persistent macroeconomic pressures and client assignment losses.
Public Relations and Creative Agencies Decline
Public Relations like-for-like declined by 1.7% and creative agencies saw a 3.9% decline, affected by client assignment losses and challenging environments.
Tech and Interest Cost Increases
Net finance costs increased to GBP 280 million due to higher interest rates from bond refinancing.
Cautious 2025 Guidance
Guidance for 2025 is flat to minus 2% like-for-like, reflecting macroeconomic uncertainty and the impact of net new business.
Company Guidance
In the call, WPP provided guidance for fiscal year 2025 with several key financial metrics and strategic priorities highlighted. The company reported a net revenue decline of 1% for 2024, attributing this to challenges such as an 80 basis point drag from China and reduced discretionary spend in the fourth quarter. Despite these headwinds, they improved their headline operating margin by 40 basis points to 15% and achieved an operating cash flow conversion of 86%. Net debt was reduced by GBP 0.8 billion, ending 2024 at GBP 1.7 billion. For 2025, WPP is guiding to a like-for-like revenue range of flat to minus 2%, with expectations of maintaining flat margins despite a challenging macro environment. The company plans to invest GBP 50 million incrementally in AI and data through WPP Open, aiming to leverage AI for creative and media efficiencies. Additionally, they highlighted recent new business wins and improvements in client retention as pivotal for future growth, while also emphasizing the strategic focus on delivering integrated services and facilitating marketing transformations for clients.WPP Financial Statement Overview
Summary
WPP's financial performance shows improved profitability and strong cash flow generation, despite a slight decline in revenue. Operational efficiency improved with better margins, but high leverage remains a concern. Strong cash flow provides a cushion for future stability.Income Statement
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 2023.72
Positive
Balance Sheet
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.65
Positive
Cash Flow
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.78
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 14.74B | 14.84B | 14.43B | 12.80B | 12.00B |
| Gross Profit | 2.45B | 2.52B | 2.54B | 2.20B | 2.01B |
| EBITDA | 1.59B | 1.91B | 2.03B | 1.78B | -1.85B |
| Net Income | 542.00M | 110.40M | 682.70M | 637.70M | -2.97B |
Balance Sheet | |||||
| Total Assets | 25.51B | 26.62B | 28.82B | 27.87B | 36.17B |
| Cash, Cash Equivalents and Short-Term Investments | 2.64B | 2.22B | 2.49B | 3.88B | 12.90B |
| Total Debt | 6.35B | 6.88B | 7.18B | 6.83B | 15.75B |
| Total Liabilities | 21.77B | 22.79B | 24.66B | 23.80B | 31.12B |
| Stockholders Equity | 3.48B | 3.38B | 3.68B | 3.62B | 4.73B |
Cash Flow | |||||
| Free Cash Flow | 1.22B | 1.02B | 477.60M | 1.74B | 1.78B |
| Operating Cash Flow | 1.41B | 1.24B | 700.90M | 2.03B | 2.05B |
| Investing Cash Flow | 278.00M | -380.40M | -408.90M | -638.40M | -163.40M |
| Financing Cash Flow | -989.00M | -904.70M | -1.91B | -2.06B | -250.50M |
WPP Technical Analysis
Negative
27.83
Price Trends
35.74
Negative
36.42
Negative
42.60
Negative
Market Momentum
-2.41
Positive
22.37
Positive
3.92
Positive
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 27.83 is below the 20-day moving average (MA) of 32.53, below the 50-day MA of 35.74, and below the 200-day MA of 42.60, indicating a bearish trend. The MACD of -2.41 indicates Positive momentum. The RSI at 22.37 is Positive, neither overbought nor oversold. The STOCH value of 3.92 is Positive, 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $13.77B | 10.19 | 33.96% | 3.94% | 5.21% | -3.74% | |
71 Outperform | $1.32B | 966.67 | 0.19% | ― | 9.86% | ― | |
70 Outperform | $1.23B | 9.39 | 13.46% | ― | -1.18% | 100.33% | |
69 Neutral | $8.94B | 18.48 | 13.33% | 5.46% | -3.18% | -53.36% | |
68 Neutral | $1.28B | 18.96 | 4.12% | ― | 3.24% | 36.80% | |
66 Neutral | $6.06B | 8.66 | 16.04% | 11.91% | 2.07% | 407.27% | |
59 Neutral | C$3.39B | 8.06 | -17.94% | 4.90% | -2.63% | -19.63% |
* Communication Services Sector Average
Performance Comparison
WPP
WPP
27.83
-18.04
-39.33%
IPG
Interpublic Group of Companies
24.18
-4.13
-14.59%
ZD
Ziff Davis
30.33
-19.28
-38.86%
STGW
Stagwell
4.93
-2.12
-30.07%
OMC
Omnicom Group
71.06
-17.73
-19.97%
CRTO
Criteo SA
23.04
-21.72
-48.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.