Analyst Note| Ali Mogharabi |
We are increasing our fair value estimate for Interpublic Group to $31 from $29, as the narrow-moat firm has displayed the ability to use its creativity, data, and technology offerings to not only bring in more advertisers but also to convince clients to increase spending. While last year’s pandemic-ridden second quarter created easy comps, this second quarter’s top and bottom lines came in well above our internal projections and FactSet consensus estimates. IPG’s net revenue also represented an impressive high-single-digit organic growth from 2019. Recovery was evident in all regions and in both of business segments. In addition, management raised its full-year guidance. We remain confident that as the economic turnaround continues, more ad spending will follow, further driving revenue growth and creating operating leverage for IPG this year.