Berenberg raises target price on WPP

Berenberg said that like European rival Publicis, WPP had delivered "much better than expected" first-half results, with the second quarter being much less negatively affected by the pandemic than anticipated.

As a result, the German bank felt upgrading its estimates to put operating profit forecasts modestly ahead of pre-results consensus for 2020 was the right move.

However, the analysts highlighted that their changes to 2021 numbers were "less dramatic" given a less advantageous FX situation, as well as its assumption that a less steep decline will be matched by a less dramatic recovery.

"While clearly cheap, WPP trades, on both levered and unlevered metrics, at a premium to Publicis, and we see more upside in the French group," said Berenberg, which reiterated its 'hold' rating on the stock.