• by Joe Mandese , February 11, 2011

Citing an overall strengthening of the advertising economy, an influential Wall Street equities team has upgraded Interpublic's stock to a "buy" recommendation from "hold," because the agency holding company has some of the greatest upside on Madison Avenue. "We like it again," the Deutsche Bank team wrote in an equities research report sent to investors this morning.

"We are upgrading IPG from Hold to Buy with a $15 price target on the back of increasing evidence that ad market strength and momentum is continuing into 2011, particularly in the U.S. where IPG has 57% exposure," the report reads. "Simply put, we want to own the agency with the most leverage to a sustained recovery, and we think the healthy environment increases the likelihood of better than expected return of capital."

The Deutsche team also cited the relatively strong earnings release from Publicis on Thursday as proof of a rebounding advertising economy. But it is mainly the intel it's been getting from media buyers that it surveyed recently that is causing it to upgrade the whole sector.

"We had originally forecast 2011 to be a relatively normal year for advertising, given the muted economic recovery and more challenging comparatives," the team wrote. "We have since changed our stance due to overwhelming evidence to the contrary both from the economy and the ad market."

Even so, it cautioned investors that its Interpublic stock upgrade is contingent on the company's agencies retaining some big accounts currently in review, including Microsoft, S.C. Johnson, and the U.S. Army.