• Associated Press via CNBC, Tuesday, October 2, 2007 10:15 AM

One top Wall Street analyst sees trouble ahead for the ad business, enough that he cut his price target on WPP Group, citing concerns of a softening U.S. economy. Gareth Davies of JP Morgan is bearish on the holding company's U.S. business next year and beyond, noting a recent stock tumble that has brought the company's shares down about 9% over the last few months.

"More recent falls have been driven by macro concerns focused around the U.S. and U.K. consumer and the impact this could have on advertising spend," Davies says. He adds that WPP is also under pressure from new competition, pointing up Google's $3.1 billion purchase of online agency DoubleClick earlier this year.

Long-term, though, Davies thinks WPP can gain from some strong market positions, especially in places like China, where it is apt to get a boost from the Beijing Olympics. "WPP has the largest share of revenues coming from emerging markets of all the major global agencies," he notes.

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