Publicis Earnings: Data and Technology, and Media Continue To Drive Growth; Increasing Fair Value 2.5%

Publicis’ first-half results clearly demonstrated the benefits of its investments in technology and data analytics capabilities. We think these investments position the firm not only to attract and win new accounts, but also to meet increasing demand of current clients, retain a higher percentage of them, and possibly create a switching cost advantage. As we anticipated, the results indicate that advertisers may raise spending a bit during the second half of this year. We increased our Publicis top- and bottom-line projections slightly, resulting in a 2.5% higher fair value estimate of EUR 79. While the shares of narrow-moat Publicis continue to trade at a discount to our fair value estimate, we recommend a higher margin of safety before investing.