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The Interpublic Group of Companies Inc IPG

Morningstar Rating
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Stock XNYS Rating as of
$30.98 +0.72 (2.38%)
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As of Delayed Price Closed
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Company Report

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IPG Earnings: A Turnaround Versus Rivals Remains Elusive

Michael Hodel

Narrow-moat IPG's turnaround continues to languish amid client losses and an unfavorable business mix. A strong international performance lifted organic revenue growth to 1.7% versus 1.3% last quarter, but IPG continues to underperform its peers, especially in the US. Exposure to technology and telecom clients remains a major pain point, which management claims caused a 1% reduction in organic growth during the quarter. Though management reduced 2024 guidance to around 1% organic growth, versus 1%-2% previously, this falls within our expectations. We are maintaining our $39 fair value estimate.

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Price vs Fair Value

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IPG is trading at a 347% premium.
Price
$30.98
Fair Value
$51.00
Uncertainty
High
1-Star Price
$83.47
5-Star Price
$39.80
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Although the environment is evolving, there will always be a market for creating and delivering compelling advertising to consumers around the globe.

Bears

Because most of its profits come from mature markets like the U.S. and Europe, IPG's organic revenue growth could lag its peers.

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News

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Trading Information

Previous Close Price
$30.26
Day Range
$30.38–31.36
52-Week Range
$27.20–35.24
Bid/Ask
$30.62 / $31.33
Market Cap
$11.64 Bil
Volume/Avg
5.4 Mil / 3.8 Mil

Key Statistics

Price/Earnings (Normalized)
10.87
Price/Sales
1.08
Dividend Yield (Trailing)
4.13%
Dividend Yield (Forward)
4.26%
Total Yield
7.16%

Company Profile

Interpublic Group is among the world’s largest advertising holding companies based on annual revenue. It provides traditional advertising services along with digital and other services such as public relations through various acquisitions. IPG has made these services available in over 100 countries. The company generates about 65% of revenue in the US and 17% in the UK and Europe.
Sector
Communication Services
Industry
Advertising Agencies
Stock Style Box
Mid Value
Total Number of Employees
56,800
Website
https://www.interpublic.com

Competitors

Valuation

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Metric
IPG
PUB
OMC
Price/Earnings (Normalized)
 10.8712.9312.43
Price/Book Value
 3.052.515.13
Price/Sales
 1.081.621.26
Price/Cash Flow
 8.5712.709.99
Price/Earnings
IPG
PUB
OMC

Financial Strength

Metric
IPG
PUB
OMC
Quick Ratio
 0.990.930.75
Current Ratio
 1.060.940.93
Interest Coverage
 6.228.709.99
Quick Ratio
IPG
PUB
OMC

Profitability

Metric
IPG
PUB
OMC
Return on Assets (Normalized)
 6.15%4.99%6.01%
Return on Equity (Normalized)
 28.44%18.53%46.40%
Return on Invested Capital (Normalized)
 13.35%11.43%15.24%
Return on Assets
IPG
PUB
OMC
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