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The Interpublic Group of Companies Inc IPG

Morningstar Rating
$32.45 +0.02 (0.06%)
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Company Report

IPG Earnings: High Client Concentration in Technology and Telco Pressures Organic Growth

IPG returned to organic growth in the fourth quarter after three consecutive declining quarters as waning economic uncertainty pushed media and project spending higher. While we view the firm’s media, creativity, technology, and data analytics capabilities as similar to its peers, like WPP, its heavier client concentration in technology and telecommunication is pressuring organic growth. We expect demand in this group to improve this year. Better growth, combined with a lower headcount and more efficiency, could result in margin expansion. The narrow-moat IPG continues to trade at a discount to our fair value estimate that we are raising to $39 from $36.

Price vs Fair Value

IPG is trading at a 17% discount.
Price
$32.45
Fair Value
$37.00
Uncertainty
High
1-Star Price
$39.16
5-Star Price
$68.40
Economic Moat
Rybwgt
Capital Allocation
Jbmccqmk

Bulls Say, Bears Say

Bulls

Although the environment is evolving, there will always be a market for creating and delivering 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 some of its peers.

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News

Trading Information

Previous Close Price
$32.43
Day Range
$32.1132.67
52-Week Range
$27.2040.95
Bid/Ask
$29.95 / $34.00
Market Cap
$12.29 Bil
Volume/Avg
3.2 Mil / 3.7 Mil

Key Statistics

Price/Earnings (Normalized)
11.17
Price/Sales
1.12
Dividend Yield (Trailing)
3.82%
Dividend Yield (Forward)
4.07%
Total Yield
6.67%

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 more than 80% of its revenue from developed regions such as the United States and Europe.
Sector
Communication Services
Industry
Advertising Agencies
Stock Style Box
Mid Value
Total Number of Employees
57,400

Competitors

Valuation

Metric
IPG
PUB
OMC
Price/Earnings (Normalized)
11.1713.7911.55
Price/Book Value
2.654.70
Price/Sales
1.121.671.18
Price/Cash Flow
8.4311.429.17
Price/Earnings
IPG
PUB
OMC

Financial Strength

Metric
IPG
PUB
OMC
Quick Ratio
1.010.900.81
Current Ratio
1.060.920.95
Interest Coverage
6.628.789.75
Quick Ratio
IPG
PUB
OMC

Profitability

Metric
IPG
PUB
OMC
Return on Assets (Normalized)
6.42%4.90%5.68%
Return on Equity (Normalized)
30.87%18.09%45.26%
Return on Invested Capital (Normalized)
14.35%11.11%14.64%
Return on Assets
IPG
PUB
OMC
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Advertising Agencies Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
PGPEF
Publicis Groupe SARxykc$26.6 Bil
PUBGY
Publicis Groupe SA ADRHpxxfqt$26.6 Bil
OMC
Omnicom Group IncBgsgzc$17.5 Bil
WPPGF
WPP PLCZrtz$9.9 Bil
WPP
WPP PLC ADRDgvqh$9.9 Bil
DNTUY
Dentsu Group Inc ADRCtzyg$7.5 Bil
DNTUF
Dentsu Group IncNmk$7.5 Bil
CRTO
Criteo SA ADRSflr$1.8 Bil
MGNI
Magnite IncVdnw$1.3 Bil

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