On Monday, Bank of America reiterated its Buy recommendation on Publicis shares, which it considers well-equipped to face a possible recession.
While acknowledginging that the advertising and communications group is highly exposed to the economic cycle, as well as the US market, where it generates 60% of its sales, the US investment bank says it perceives a favorable risk/reward profile on the stock after its recent 15% decline.
Despite the company's dynamic growth and market share gains, its market valuation has fallen below 12x earnings, i.e. a discount of 10% to 15% compared with peers such as Capgemini and Accenture, the New York-based firm argues.
However, BofA believes that its subsidiary Sapient, which specializes in the digital transformation of businesses (15% of total sales), could be affected by a wait-and-see attitude from its customers, leading it to revise its estimates for the group downwards.
The broker has therefore reduced its target price for Publicis shares from €133 to €124.
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