Analyst Note| Ali Mogharabi |
We are maintaining our $85 fair value estimate for narrow-moat Omnicom. The firm’s first quarter 2021 results beat expectations on the top and bottom line, driven by continuing improvements in ad spending in all regions. While organic revenue declined during the quarter, the firm expects second-quarter and full-year organic growth due to easier comps and continuing economic recovery. Omnicom also announced that it will restart its share buyback program in the second quarter, after suspending it in 2020 because of the pandemic. We did not make any material changes to our projections. We remain confident that more vaccinations globally will further drive economic recovery, resulting in organic growth in all of Omnicom’s markets this year.