New York-based The Interpublic Group of Companies, Inc. (IPG) provides advertising and marketing services worldwide. With a market cap of $11.8 billion, Interpublic operates through Media, Data & Engagement Solutions, Integrated Advertising & Creativity Led Solutions, and Specialized Communications & Experiential Solutions segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," Interpublic fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the advertising agencies industry.
Interpublic touched its 52-week high of $35.17 on Mar. 14 and is now trading 12.7% below that peak. IPG gained 5.4% over the past three months, outpacing the Communication Services Select Sector SPDR ETF Fund’s (XLC) 3.5% gains during the same time frame.
However, over the longer term, IPG has underperformed XLC. IPG gained 6.4% over the past year and dipped 5.9% in 2024, lagging behind XLC’s 35.3% gains over the past 52 weeks and 22.5% returns on a YTD basis.
To confirm the bearish trend and recent uptick in prices, IPG has mostly traded below its 200-day moving average over the past year and above its 50-day moving average since late July, with slight fluctuations.
Shares of Interpublic fell 1.2% after the release of its Q2 earnings on Jul. 24. Although the company reported a modest topline growth of 1.6% year-over-year, reaching $2.7 billion, its net income available for common shareholders dipped by 19.2% to $214.5 million. This drop in net income is primarily due to a substantial increase in income tax provision to $75.6 million compared to the year-ago quarter’s provision of $10.6 million.
Given its performance in the first half of the year, trends within its client roster, and macro sentiment, Interpublic gave a modest topline organic growth guidance of 1% and expects to report an EBITA margin of 16.6%, a slight decline from 16.7% reported in the previous year. This likely did not impress investors.
Interpublic’s competitor, Omnicom Group Inc. (OMC), gained 35.3% over the past year and 16.3% in 2024, outperforming IPG.
Among the nine analysts covering the IPG stock, the consensus rating is a “Hold.” The mean price target of $32.11 suggests a potential upside of 4.5% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
