The change in company guidance reflected yet again the hardships that traditional ad groups face, with revenues being squeezed by competition from Facebook and Google as well as tightening budgets by major clients.
Publicis was down 13% in early trading on Friday, also dragging down the shares of British rival WPP. Publicis was at its lowest level since July 2012.
Investment banks Macquarie and Societe Generale both cut their recommendations on Publicis, with SocGen cutting Publicis to "hold" from "buy".
Late on Thursday, Publicis, which competes against bigger rivals WPP and Omnicom, said it now expected sales to fall by about 2.5% on an underlying basis, compared to a previous outlook of "broadly stable net revenue".
Publicis Chief Executive Arthur Sadoun, who succeeded company veteran and current chairman Maurice Levy in 2017, has promised to offset the decline in ad spending by steering the business closer to consultancy groups.
He is also aiming to offer clients technological tools on top of traditional creative marketing campaigns, but the strategy is taking more time than expected to bear fruit.
"There is significant long-term value in Publicis in our view, since we remain confident in the agency model and adaptability, but the company-specific string of revenues misses implies a longer normalisation phase than we had expected," SocGen analysts wrote in a note.
(Reporting by Sudip Kar-Gupta; editing by Jason Neely and Emelia Sithole-Matarise)
By Sudip Kar-Gupta