Describing its sentiment for the major
agency holding company stocks it follows as going from "cautiously optimistic" to "apathetic," a major Wall Street equity research team nonetheless projects Interpublic as the best poised company for
the near term among the group.
"We expect IPG to lead the group in organic revenue growth as there are currently no major losses weighing down results (as was the case in 2019), while a
potential uptick in media account reviews could be an opportunity for IPG to gain further share in this area (a consistent theme over the past several years of outperformance)," BMO internet and media
industry analyst Daniel Salmon writes in a third quarter earnings preview report sent to investors.
The report, entitled "A Group In Transition," raises a number of meaningful
questions for Interpublic, as well two other holding companies -- Omnicom and WPP -- highlighted in it.
Among the key questions for IPG's management are:
- How has the launch of the Kinesso developer community progressed thus far?
- What was the strategic rationale for the recent folding CompassPoint
into Mediahub's U.S. network?
Questions for Omnicom's management include:
- "Do you expect third party service costs to change meaningfully as a part of
your overall cost structure going forward? Are there puts and takes related to certain subsegments of your business that may affect this more significantly over the next few quarters?" (Omnicom
disclosed third party service costs during its second quarter earnings report and said
they were related to costs where the company serves as principal -- as when for example it buys and resells media to clients in packaged programmatic deals. Those service cost revenues were down
by $400 million in the second quarter.)
- "Could you comment on the appointment of Ralph Pardo as CEO of Hearts & Science and Catherine Sullivan as CEO of PHD? Could you share
any further thoughts on how you see this new generation of leaders being different and unique vs. the prior given the significant restructuring currently happening within the sector? Are management
changes at the top of Omnicom Media Group largely complete?"
Questions for WPP include:
- "Could you provide an update on Kantar’s business amidst
the current pandemic? Also, could you comment on the company’s 'Moonshot' initiative and how WPP may be involved?"