Goldman Sachs has told its investor clients that WPP is a good place to park their dollars after it determined CV-19 hadn’t left the global ad market in as dire a place as many had predicted.
UK media is reporting that Goldman Sachs was now tipping WPP as a “buy” stock. That saw the share price rise by 0.7 per cent – or four-and-a-half UK pence – to £64.33 ($A117.57).
Another intresting aside of Goldman Sachs’ report found that, on average, WPP employees in the UK were paid four per cent more than those at rival agencies. However, the report stopped short of suggesting this was due to the fact that it employed superior talent over its rvials.
Goldman Sachs noted that, according to industry reports, WPP had won the $US500 million Unilever China media account in May, although that was offset by its US operations losing cleaning supply company Clorox’s digital account worth $US275 million to Omnicom.
According to the bank’s research, WPP’s revenues are actaully up 0.9 per cent at the same time last year.
The report noted: “Overall, we see recent new business performance together with the phasing out of the major Ford account loss as supportive of an improvement in organic growth in 2H2020.”
Goldman Sachs also noted that the media industry in general looked in relatively good health considering the current global pandemic. Agencies had enjoyed $US3.8 billion in new business wins in 2020, a staggering 23 per cent increase YOY.
“We note that there are currently no large accounts under review, which is not surprising to us given the disruptions related to the COVID-19 crisis,” the report noted.
“We would expect review activity to remain muted in the coming months, which should be a short-term relief for the ad agencies,” it said.
