WPP Stock Tumbles as ‘Elevate28’ Strategy Fails to Impress

WPP (LON: WPP), the world's largest advertising group, saw its shares plummet close to 7% on Thursday following the unveiling of its “Elevate28” strategic plan and preliminary 2025 results.

The market's reaction suggests skepticism surrounding the company's ambitious turnaround strategy, despite management's confidence in its potential.

The company's plan to transition from a holding company structure to a streamlined, integrated entity with four core operating units – WPP Media, WPP Creative, WPP Production, and WPP Enterprise Solutions – across four regions failed to inspire investor confidence. This restructuring aims to deliver fully integrated, AI-enabled solutions.

The core of the “Elevate28” plan centers on becoming the “trusted growth partner” for major brands, navigating change, and driving growth in a complex environment. The plan outlines three phases: stabilization in 2026, building momentum in 2027, and accelerated growth from 2028 onwards, supported by £500 million in gross annualised cost savings.

However, the market appears unconvinced by the timeline and the scale of the proposed transformation. Concerns linger about WPP's ability to effectively execute such a significant overhaul, particularly given its recent underperformance, which CEO Cindy Rose attributed to “excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution.”

While WPP anticipates total cash costs of approximately £400 million over two years to achieve the £500 million savings target, the initial investment required for this transformation may be weighing on investor sentiment.

A key component of WPP's strategy is leveraging its “WPP Open” agentic marketing platform. The company intends to connect capabilities through this platform, differentiate itself with trusted data solutions via “Open Intelligence,” and expand strategic technology and data partnerships.

The company's outlook anticipates a return to organic growth during 2027, with accelerated growth, improved margin, and strong cash conversion targeted for 2028 and beyond. The market, however, seems to be adopting a “wait-and-see” approach, demanding concrete evidence of progress before rewarding the stock.

The company plans to reinvest a significant portion of the cost savings into high-growth areas, further indicating a shift in investment priorities. Disciplined capital allocation will remain a focus, with the company aiming to maintain an investment-grade balance sheet while delivering attractive returns for shareholders.

CEO Cindy Rose stated, “My first six months as CEO have only reinforced my conviction that WPP is an extraordinary company… Today we are unveiling a bold plan for a simpler, more integrated WPP,” reinforcing the company’s commitment to its new strategy.