Publicis: continued doubts after Dentsu warning.

(CercleFinance.com) - The Publicis share is having a difficult summer, having start the season at around 68 euros.


The stock is down again this morning at 62.5 euros, having fallen by about 8% since the start of the summer, while the CAC 40 index has only fallen by 2.6%. This also applies to London, where the British group WPP (which is down 6.6%, while the FTSE 100 has remained virtually flat). The profit warning made by Dentsu is likely to have a greater impact on the advertising sector.

This morning, the Japanese communications and advertising giant Dentsu cut its forecast when it published lackluster interim results. For example, it cut its 2017 (in GAAP data) sales guidance by 1.5%, while it reduced its forecast for underlying earnings by 3.5%. Dentsu's management refers to the persistent impact, outside Japan, of the adjustment of the advertising budgets of certain customers, particularly in the consumer goods sector.

However, analysts at Liberum are reassuring: "We believe that the weakness in the consumer packaged goods companies' spend is cyclical," they say. Liberum emphasizes the statements of fast moving consumer goods (FMCG) companies, which "suggest a rise in marketing spend in H2”
Even so, Liberum maintains its buy rating on the WPP stock, with a target price of 2,000 pence, while it recommends investors hold the Publicis share, with a target price of 68 euros.



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