Valued at a market cap of $20.2 billion, Omnicom Group Inc. (OMC) is a leading global company in advertising, marketing, and corporate communications. The New York-based company operates across major regions worldwide, providing services such as media planning, branding, and digital marketing. The company is slated to announce its fiscal Q3 earnings results on Tuesday, Oct. 15.
Ahead of this event, analysts expect the advertising company to report a profit of $1.97 per share, reflecting a 5.9% growth from $1.86 per share in the year-ago quarter. The company has consistently exceeded Wall Street's earnings expectations in the past four quarters. The company exceeded the consensus EPS estimate by a 3.7% margin in the most recent quarter.
For fiscal 2024, analysts expect OMC to report EPS of $7.88, marking a growth of 6.3% from $7.41 in fiscal 2023. Looking forward to fiscal 2025, EPS is expected to grow 6.2% year-over-year to $8.37.
In 2024, shares of Omnicom have lagged behind the broader markets, gaining 19.5%, while the broader S&P 500 Index ($SPX) has risen 20.8%, and the Communication Services Select Sector SPDR ETF Fund (XLC) has returned 24.4% on a YTD basis.
Despite reporting better-than-expected Q2 adjusted EPS of $1.95 and revenue of $3.9 billion on Jul. 16, Omnicom's shares fell 4% the following day due to concerns over the slower-than-anticipated growth in its precision marketing segment and cautious investor sentiment regarding future ad spending sustainability post-election and Olympics.
However, on Sep. 27, Omnicom announced the acquisition of LeapPoint to enhance its precision marketing capabilities and strengthen its end-to-end content supply chain solutions. This move leverages LeapPoint's expertise in Adobe technologies to optimize marketing workflows and deliver personalized customer experiences efficiently.
Analysts' consensus view on OMC stock remains cautiously optimistic, with a "Moderate Buy" rating overall. Out of 11 analysts covering the stock, seven recommend a "Strong Buy," one "Moderate Buy," two give a "Hold" rating, and one rates it a "Moderate Sell."
The average analyst price target for OMC is $108.50, suggesting a potential upside of only 4.9% from the current levels.
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