IPG's Strong Q1 Results Are Further Indication of an Advertising Recovery; Raising FVE to $29

Narrow-moat Interpublic Group reported better-than-expected organic growth in revenue and further margin expansion, as economic recovery amid the pandemic continues to drive more ad spending. The firm issued guidance for organic growth between 5% and 6% and operating margin of 15.5%, which is higher than we had been projecting. We did not make any significant changes to our revenue projection but did widen our margin assumption, which resulted in our fair value estimate increasing to $29 from $28. IPG continues to execute well on all fronts, and while the company is trading at a slight premium to our fair value, its 3.8% dividend yield may be attractive to some investors.