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MarketScreener Homepage  >  Equities  >  Nyse  >  Omnicom Group    OMC

OMNICOM GROUP

(OMC)
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Delayed Quote. Delayed Nyse - 09/20 06:30:00 pm
77.87 USD   -0.80%
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Publicis cuts revenue guidance after disappointing second quarter

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07/18/2019 | 01:39pm EDT
Logo of Publicis is seen at VivaTech fair in Paris

PARIS (Reuters) - Publicis, the world's third-biggest advertising group, cut its 2019 revenue growth guidance on Thursday after reporting a weaker-than-expected performance in the second quarter as it struggles to revive sluggish sales in the United States.

By Mathieu Rosemain and Gwénaëlle Barzic

Publicis, whose revenue is being squeezed by competition from Facebook and Google as well as tightening ad budgets by major clients, now expects a "broadly stable net revenue" in 2019, excluding the impact of acquisitions and foreign exchange.

Publicis had previously forecast higher organic revenue growth in 2019 than in 2018, but gave no precise figure.

In 2018, its organic revenue growth amounted to 0.8%, excluding the underperformance of a U.S. business that it sold in January.

The group posted second-quarter 2019 organic growth of 0.1 percent, missing a market consensus estimate of 0.7 percent, as the gains of key media budgets for GlaxoSmithKline and Fiat-Chrysler failed to offset weaker sales in the United States, its number one market.

That compares with the 2.8% organic growth posted by bigger U.S. rival Omnicom over the same period.

"We still face the same issue, as anticipated, as our contracts on traditional ads in the United States continue to suffer," Chief Executive Officer Arthur Sadoun told reporters ahead of the results.

MARKET UPDATE

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 consulting groups and offering clients technological tools on top of traditional creative marketing campaigns.

That is why Publicis snapped up data-focused marketing business Epsilon earlier this month for $4.4 billion (£3.5 billion) -- its biggest acquisition ever.

Through Epsilon, Publicis hopes to beef up its data and tech expertise following the difficult absorption of digital ad business Sapient, bought in 2015.

Publicis' quarterly underperformance led the group to put its ambitious 2020 organic revenue growth target under review. Publicis expected an underlying sales growth target of 4 percent - an objective that many analysts considered nearly impossible to attain.

Sadoun cited the takeover of Epsilon as the main reason for putting the longer term growth guidance under review.

"We will update you, certainly in the coming months," the CEO said in a call with analysts.

Despite the lower revenue growth forecast, Publicis confirmed its 2019 operating margin and EPS targets. The group expects its operating margin rate to improve in 2020, on top of a 5-10% increase in its headline EPS.

(Reporting by Mathieu Rosemain and Gwenaelle Barzic; Editing by GV De Clercq and Elaine Hardcastle)

By Mathieu Rosemain and Gwénaëlle Barzic

Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET -0.72% 1229.84 Delayed Quote.17.69%
FACEBOOK -0.11% 189.93 Delayed Quote.44.89%
FIAT CHRYSLER AUTOMOBILES -0.52% 12.336 End-of-day quote.-2.22%
GLAXOSMITHKLINE 0.83% 1671.6 Delayed Quote.12.10%
OMNICOM GROUP -0.80% 77.87 Delayed Quote.6.32%
PUBLICIS GROUPE 0.41% 46.57 Real-time Quote.-7.01%
WPP GROUP -0.20% 1008 Delayed Quote.19.06%
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Financials (USD)
Sales 2019 14 935 M
EBIT 2019 2 131 M
Net income 2019 1 329 M
Debt 2019 1 135 M
Yield 2019 3,34%
P/E ratio 2019 13,0x
P/E ratio 2020 12,3x
EV / Sales2019 1,21x
EV / Sales2020 1,17x
Capitalization 16 939 M
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Technical analysis trends OMNICOM GROUP
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TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 14
Average target price 81,58  $
Last Close Price 77,87  $
Spread / Highest target 15,6%
Spread / Average Target 4,77%
Spread / Lowest Target -12,7%
EPS Revisions
Managers
NameTitle
John D. Wren Chairman, President & Chief Executive Officer
Philip J. Angelastro Chief Financial Officer & Executive Vice President
John R. Purcell Independent Director
Leonard S. Coleman Lead Independent Director
Linda Johnson Rice Independent Director
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