Adland Stocks Fall After Analyst's Advice To Exit Ad Sector

On Monday morning, Pivotal Research senior analyst Brian Wieser issued a note downgrading the ratings he had for WPP, Omnicom and Publicis, urging investors to sell their shares in those companies and to exit the sector for the foreseeable future.

Investors took Wieser’s advice — driving those stocks down, along with the stock of Interpublic Group, which Wieser downgraded to a “hold” position.

Wieser’s advice was based on what he termed the “emerging concerns among marketers around different forms of agency rebates in the United States.”  

The stocks dropped significantly more than the Dow, which was down 0.45% on the day. Among the big four holding companies, Omnicom was down the most on a percentage basis, with a decline of 1.53% to $77.42 on the New York Stock Exchange. IPG was down 0.92% on the same exchange.

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Publicis was down 0.85% on the Euronext exchange, while WPP American Depository Receipts on the NASDAQ exchange fell 0.69%. Havas Group, not mentioned in Wieser’s report, was down 0.55% on the Euronext Exchange.

MDC Partners, also not mentioned in Wieser’s report, emerged unscathed in today’s trading. In fact, the Toronto-based holding company, which trades on the NASDAQ Exchange, was up 3.11% to $27.54.

Dentsu also appeared unaffected by Wieser’s note — the company posted a slight gain (0.17%) on the Tokyo Exchange. 

Reps for WPP, IPG, Omnicom and Publicis didn't answer queries about Wieser's note to investors.

3 comments about "Adland Stocks Fall After Analyst's Advice To Exit Ad Sector".
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  1. Jim Meskauskas from Media Darwin, Inc., April 14, 2015 at 3:50 p.m.

    Non-story of the day.

  2. Alan Westendal from West End Communications/Consul, April 14, 2015 at 4:57 p.m.

    This is hardly the sort of rush to the exit you'd expect in reaction to a truly scary recommendation. In fact, most of these stocks that went down yesterday, went back up today.

    Also, as a matter of journalistic presentation, to note that a stock "was down the most on a percentage basis, with a decline of 1.53% to $77.42," isn’t as informative as: “the stock was down $0.79, to $77.42 from $78.62, a decline of 1.53%, the greatest relative decline with the group.” First of all, the 6-bit dip doesn’t seem like that big a deal (it isn’t), and also, a lot of ad folks are, frankly, borderline innumerates, so flipping between absolute values and percentages obfuscates rather than illuminates.

  3. Augustine Fou from Marketing Science Consulting Group, Inc., April 15, 2015 at 3:55 p.m.

    I would agree with Brian on all points -- and here is my evidence and data to support it. 
    http://www.slideshare.net/augustinefou/investment-thesis-ad-agency-sector-by-augustine-fou-april-2014

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