Berenberg raises target price on WPP

Berenberg stated that with Q1 like-for-like growth of 9.5%, ahead of company-compiled consensus of just over 7%, WPP's new guidance of 5.5-6.5% reflected a stronger quarter for the business, while Q2-4 assumptions were broadly maintained.

However, given growing headwinds to consumption and, as far as Berenberg was concerned, marketing expenditure, this approach was "a bit surprising", particularly as peers OMC and Publicis, which both performed slightly better in the first quarter, maintained their full-year outlook, effectively allowing for a softer performance in the rest of the year.

"While WPP's approach reflects the fact that it is not noticing any change in customer behaviour – a point also made by its peers – it seems quite optimistic given the plethora of data points suggesting that a squeeze is coming," said the German bank, which reiterated its 'hold' rating on the stock.

"We raise our lfl revenue less passthrough costs growth from 4.6% to 4.9% for 2022, which is below the aforementioned guidance of 5.5-6.5%."