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The Interpublic Group of Companies Inc IPG

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IPG's Strong Q1 Results Are Further Indication of an Advertising Recovery; Raising FVE to $29

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

Narrow-moat Interpublic Group reported better-than-expected organic growth in revenue and further margin expansion, as economic recovery amid the pandemic continues to drive more ad spending. The firm issued guidance for organic growth between 5% and 6% and operating margin of 15.5%, which is higher than we had been projecting. We did not make any significant changes to our revenue projection but did widen our margin assumption, which resulted in our fair value estimate increasing to $29 from $28. IPG continues to execute well on all fronts, and while the company is trading at a slight premium to our fair value, its 3.8% dividend yield may be attractive to some investors.

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Company Profile

Business Description

Interpublic Group is the world's fourth- largest ad holding company, 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 75% of its revenue from developed regions such as the United States and Europe.

909 Third Avenue
New York, NY, 10022
T +1 212 704-1200
Sector Communication Services
Industry Advertising Agencies
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 50,200