Berenberg hikes price target on WPP
Analysts at Berenberg raised their target price on advertising firm WPP from 885.0p to 925.0p on Friday, stating there were "few surprises" in its actual full-year results.
Berenberg said its investment thesis on WPP remained broadly consistent with its December capital markets day, with headline operating profits coming in at £1.26bn, exactly in line with estimates and well ahead of the £829.0m it anticipated back in March.
While Berenberg said there was lots of colour on the results call, it also said there was nothing to "fundamentally change the investment case", leading it to reiterate its 'hold' rating on the stock.
While the German bank said WPP's valuation was "not challenging", it also believes that it fairly reflects the low visibility on a return to positive, sustainable, top-line momentum.
"It is pretty obvious that there will be growth in 2021, given the easy comps, but the real question is how WPP performs in 2022 and beyond, when growth will be reliant on fundamentals," said Berenberg, which highlighted that it continues to prefer Publicis to WPP.