IPG Earnings: Continued Client Struggles Have Muted Growth

IPG’s return to growth sputtered a bit during the first quarter, as revenue increased 1.3% versus a 1.7% gain last quarter. Management also indicated that recently lost business—which Ad Age and others have reported includes creative work for Pfizer—will preclude it from hitting the higher end of its 1%-2% organic growth target for the year. Relatively heavy exposure to technology and telecom clients also continues to weigh on IPG. The firm believes this client segment reduced organic growth by about 2.0%-2.5% during 2023 and about 1.5% during the first quarter. Most of the first-quarter drop within the segment was the result of a major client loss in 2023, indicating that spending at individual clients is stabilizing. We are maintaining our fair value estimate at $39.