WPP raised estimates for full-year sales thanks to higher client spending, but shares in the biggest advertising group fell nearly 8% as the news failed to excite investors expecting stronger forecasts.
The results come as investors and analysts try to gauge how advertising will perform against a backdrop of high inflation and slowing global economic growth.
WPP now expects comparable net sales to grow 6%-7% in 2022, up from an already upgraded forecast of 5.5%-6.5%, while keeping operating margin estimates unchanged.
Analysts and traders pointed out that WPP’s results, while strong, failed to capture the momentum seen in much more upbeat results from rival group Publicis.
“The market was not thrilled because they expected more from such a company with strong prospects. Moreover, the fact that it did not change the outlook for the profit margin, while upgrading the sales estimates, may have raised alarm, especially when considering that rival Publicis did,” analysts added.
Source: Capital
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