From Cazenova just now .... DYOR .... but quick :)

WPP - upgrade to OUTPERFORM - interims due 26 Aug which we expect to be strong, reflecting gd Q2 fig's already reported by peers. We see potential for EPS upgrades of up to 5%-10% N/T (combination of top line, margin & US$). L/T we expect EPS growth of up to 17%-18% pa before maturing at 11%-12% pa. Key risks are (1) further M&A (2) prem valuation (17.1x 06 EPS before any upgrade), representing a 31% prem to UK mkt & 33% to UK media sector. Despite this we still believe it has room to outperform. Our DCF valuation gives 760p, 28% upside from here.

Hi All,

Cazenova sent out a note today, saying they expect underperformance of the share price to reverse very quickly.

I know all analysts don't concur on this one, but the value IS there, it's just a case of waiting for the market to realise it.

Cheers,
PM

Well, at least the bugger stopped going backwards today!

WOW - up over 1 % i'm starting to feel light headed lol

Well folks, thats me out! If i had the time to wait i'm sure wpp would get back up to the 600 mark in the coming weeks. Have re used cash to fund a more risky punt, in PET.

Best of luck,

Daws

Daws Hi,

Might be an 'oooops' from you soon ....

Morgan Stanley has upgraded its rating for WPP Group to overweight from equal-weight with a 625p price target, raising estimates.

Cheers,
PM

'bout time this dawg started going in the right direction again. Hope it can maintain the rise tomorrow.

pth

Hi Paul, good luck with wpp. Happy to of moved into pet after todays close, any one who continues to short it must be bonkers! wpp is solid investment in my eyes and i'm sure you guys will be back up to the 600 mark in no time.

daws

daws

I think you made the right call on this one. For a FTSE stock WPP really is a waste of investment time.

pth

Here's a preview of what is going to appear in The Business tomorrow:

October 02, 2005



SIR Martin Sorrells WPP has underperformed its main agency rival Publicis by 10% this year and as a result now trades on lower valuations than all of its peer group.

This is interesting at a time when growth looks set to accelerate over the next three years at a top line level and enhanced by more margin benefits from the integration of Grey Global.

Agencies are well placed, and have the benefit of two secular trends.

Firstly, there is strong growth in global advertising, with an accent on south-east Asia and those markets associated with China in particular.

Secondly, there is strong growth in internet related advertising compared to traditional media. Of the big agencies, WPP has the highest exposure to both.

In addition, WPP has momentum in its business. In the first half results net new billings rose by $3.5bn, with $1.9bn in the second quarter alone, from clients such as Time Warner, Shell and Sony.

WPPs management now presents its analysis of the industry as advertising working in four-year cycles.

It is interesting to note chief executive Sir Martin Sorrells view on the current cycle: 2004 marked the full recovery from the internet bust of 2000.

It was WPPs best year ever. 2005 is showing more improvement and in theory it is the weakest year of the 2005-08 period.

This is because 2006 sees the mid-term United States congressional elections, the World cup and the Winter Olympics.

The big year, 2008, has the Beijing Olympics and the European football championships.

Obviously there are risks. Investors are perennially concerned about the outlook for consumer-based advertising and a slowdown in the global economy in general, affecting the spending intentions of WPPs clients.

In addition, there is pressure on pricing across the industry from powerful clients now scrutinising the purchase of marketing services more closely.

But the powerful industry trends leading to accelerating growth, combined with a discount valuation, should ensure that WPP is a company worth keeping a close eye on in the next 18 months.

poor neglected WPP!
Today's figures were really quite good and, from memory, Merrill repeated its buy recommendation.
Though sp is very close to the 52-week high, i think i MAY concur but would appreciate views from others

been in this for a while spread betting this is a dead cert as far as u can say that as we all know things can go wrong !! but brokers rec 7.70 but no interest it seems on here

when cash gets tight, advertising budgets get squeezed .... though WPP has already fallen quite a long way, there could easily be more downside

chart sure indicates that, unlike the header's view, WPP is worth a lot LESS!
if someone has last week's Shares Mag, i think WPP may have had a mention in there.
If so, please can you publish comment here

never did short WPP at the time, but with sp teasing down through 25 dma, this may not be a bad time to do so

have decided it's quite a good bet and acted accordingly, not just because the markets are weak, but because traditional advertising is coming under ever greater pressure from the internet and, as already stated, in tight times, advertising is the first area to be cut

WPP figures are out tomorrow and i know somewhere reckoned they would be good and there may arguably a bonus courtesy of the Olympics ..... however, as i mentioned above, in a recession, advertising is one of the first casualties and traditional advertising, the backbone of WPP, is coming under ever-increasing pressure from the internet

WPP's trading forecast rather than the historic will be what drives sp tomorrow

That may well be the case but WPP have a big presence in Asia and the US and advertising is expected to hold up with the olympics and the presidential race. I have no doubt that you are right in the long run but not convinced it will hit next years earnings to take a hit in the results tomorrow

That peak in 2007 780p was for the 2008 oympics.take your money. NEXT peak will be 2011 for 2012 oympics.

we'll know who is right and who is wrong early tomorrow!

Im the nervous one. Not comfortable to be on the opposite side of a legend like cynic. I sense some pain coming, fortunately only 5 quid a point so hopefully it wont hurt that much, although running losses in Oil shorts now well in the thousands so it hasnt been the best of months and the losses are still mounting