Publicis' Impressive Q3 Numbers Are Indicative of Healthy Overall Ad Spending; Upping FVE to EUR 67

Publicis’ total and organic net revenue growth during the third quarter exceeded FactSet consensus estimates as the firm’s investments in enhancing its digital offerings and data analytics capabilities generated solid returns. The firm’s net revenue also came in above pre-pandemic levels, further indicating a strong and nearly complete recovery of the advertising industry driven mainly by continuing solid growth in digital advertising, in line with our expectations. Management increased its guidance for the year, and we adjusted our 2021 organic net revenue growth assumption higher because of strong third-quarter numbers. However, we are also assuming higher deceleration in 2022 due to tough comps, resulting in a 4.6% increase in our fair value estimate, to EUR 67 from EUR 64.