WPP plc WPPGY underperformed the Zacks categorized Advertising and Marketing Service industry with a negative average return of 9.1% compared with a negative 4.3% for the latter, over a period of 90 days. In addition, over the same time frame, the company’s earnings estimates for the current year have been revised 2.3% downwards. This revision trend is primarily due to the continuing weakness in the company’s Data Investment Management segment.
The company recently acquired project management and procurement company, Promotion Execution Partners, LLC (“PEP”), for an undisclosed amount.
Headquartered in Cincinnati, OH, PEP has managed over 35,000 campaigns for more than 500 brands globally. It has an employee base of approximately 200, managing budgets, timelines and vendor coordination for various programs.
Per the Association of National Advertisers, the shopper marketing is expected to reach $18.64 billion in the 2016–2020, at a CAGR of 5.8%. The acquisition is a vital step in WPP’s strategy of investing in high-priority segments, which include important markets, such as the U.S.
Recently, the company’s Xaxis business acquired Triad Retail Media to establish itself as a significant player in retail media and e-commerce. Such acquisitions will help WPP establish itself as a leading player in the advertising industry.
WPP currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Publicis Groupe SA PUBGY, Marin Software Incorporated MRIN, and National CineMedia, Inc. NCMI. Publicis Groupe and National CineMedia carry a Zacks Rank #2 (Buy), whereas Marin Software sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Publicis Groupe has a long-term earnings growth expectation of 8% and is currently trading at a forward P/E of 12.6x.
Marin Software has a solid earnings history beating estimates on every occasion, with an average positive surprise of 47.9%.
National CineMedia has a long-term earnings growth expectation of 9.0% and is currently trading at a forward P/E of 37.8x.
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