Stock of the Week: WPP

VIDEO: Advertising giant has put out a decent set of numbers but the shares are down

James Gard 8 August, 2022 | 9:27AM
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James Gard: Welcome to Morningstar. Making its first appearance as stock of the week is advertising giant, WPP, which has just put out first half results this week. I'm going to have a quick look at the numbers and see what that means for the valuation.

So, the interim results cover the first half of the year, and they are consistent with the story of economic recovery from the pandemic. Compared to this time last year, revenues and profits were higher, and the dividend has been increased. So, the world's largest ad company won business this quarter from Audi, Danone and Nationwide. But as sometimes happens, a perfectly good set of numbers were met with a share price fall, in this case, around 7% on Friday morning. Shares were off nearly 30% in the year-to-date.

So, what explains that mismatch? Well, the macro picture is darkening as the Bank of England has said last week, and the advertising sector is one of the most exposed to an economic slowdown. Morningstar analysts actually think the shares are one of the most attractive in the advertising sector with a fair value around £13.40, and that's compared to a price at the moment around £8.35.

For Morningstar, I'm James Gard.

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James Gard

James Gard  is senior editor for


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