Interpublic Group Posts In Line End to 2021; 2022 Organic Revenue Growth Outlook Appears Weak

Interpublic Group reported an in line end to 2021 as third-quarter results met FactSet consensus estimates for revenue and EBITDA. While IPG generated impressive double-digit organic net revenue growth once again, shares dropped by over 7% in morning trading, perhaps reflecting disappointment with management’s 5% 2022 organic revenue growth outlook, well below the 11.9% posted in 2021. We are maintaining our $35 fair value estimate as we expected revenue growth deceleration in 2022 given tougher comparisons this year. Also, IPG’s outlook is similar to that issued by rivals Publicis and Omnicom in recent days. We recommend investors wait for further pullback in the stock before investing in this name. We now view all four ad holding companies under our coverage (WPP, Omnicom, Publicis, and IPG) as fairly valued.