We are maintaining a Neutral recommendation on
Omnicom Group Inc.
We are optimistic on the company's strong operational
performance, primarily driven by the positive outcomes in the
developing markets across Asia and Latin America. Moreover,
performances in advertising, media and sports businesses in the UK
and US market look stable despite facing several obstacles in the
Omnicom continues to focus on strengthening its potential and
expanding client base globally through acquisition of complementary
companies. Such acquisition activities, especially in Asia, are
expected to work as a key factor to augment revenue growth.
Additionally, the company's balance sheet appears sound enough to
stimulate further acquisitions and investments.
We believe the increasing demand for media services, speedy
growth of technologies along with massive proliferation of channels
would boost the company's future sales. Omnicom's cost-effective
marketing services in the field of advertising and marketing hold
future prospects for the company's margin management
However, the current cost inflation is continuously burdening
the price structure of the company and affecting its margins.
Moreover, in order to confront the fierce competition, the company
has to spend massively on its service offerings to attract new
customers while maintaining existing associations. This raises the
company's cost of production, thereby affecting its pricing
Moreover, slower-than-expected GDP growth in the US as well as
monetary devaluation across global enterprises may act as an
impediment to the company's profitability.
Omnicom is one of the largest advertising; marketing and
corporate communications companies in the world, and directly
The Interpublic Group of Companies Inc.
Publicis Groupe SA
The company holds a Zacks #3 Rank, which translates into a
short-term (1-3 months) Hold rating.
INTERPUBLIC GRP (IPG): Free Stock Analysis
OMNICOM GRP (OMC): Free Stock Analysis Report
PUBLICIS GP-ADR (PUBGY): Free Stock Analysis
WPP PLC (WPPGY): Free Stock Analysis Report
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