WPP Price Target Lowered – Analyst Sees Further Downside

WPP's share price (LON:WPP) has fallen 21.66% in the past month of trading, and now sits 47% below where it began 2025, yet analysts seem to think worse is yet to come for holders.

WPP, the global advertising and marketing firm, is facing a range of challenges, leading Barclays analyst Julien Roch to slash the firm's price target to 400p from 550p while maintaining an “Underweight” rating.

This pessimistic outlook underscores the growing concerns surrounding WPP's financial health and future prospects, as the company grapples with macroeconomic headwinds, technological disruption, leadership uncertainty, and client losses.

The recent profit warning issued on July 9th sent shockwaves through the market, revealing a deteriorating trading environment marked by intensified macroeconomic pressures and a squeeze on client spending. WPP now anticipates a 3-5% decline in like-for-like revenue for the year, a significant downward revision from its previous forecast of flat to a 2% decline.

The company also expects its headline operating profit margin to decrease by 50 to 175 basis points. This stark admission triggered a sharp sell-off, with the share price plummeting over 13% in response.

The Barclays downgrade is not an isolated incident. Other analysts have also revised their expectations downwards. JPMorgan recently lowered its price target from 590p to 480p, whilst Morgan Stanley followed suit, reducing its price target to 575p from 635pg. Morgan Stanley now forecasts approximately a 4.5% decline in organic net revenue for 2025, a considerable drop from its previous estimate of a 2% decline.

Adding to the uncertainty is the impending departure of CEO Mark Read, who announced his intention to step down at the end of 2025 after a seven-year tenure. While Read spearheaded significant restructuring efforts, including agency mergers and investments in AI-driven marketing, the company has struggled with stagnant growth and has lost ground to competitors.

The rise of artificial intelligence poses a fundamental challenge to traditional advertising agencies. Tech giants such as Meta, Google, and Amazon are offering increasingly sophisticated AI-powered advertising tools that empower clients to manage marketing campaigns in-house, thereby reducing the demand for external agencies.

While WPP has invested in its own AI capabilities, including the development of the WPP Open platform, these investments have yet to translate into significant financial returns. The fear is that WPP is racing to harness AI, but may not be fast enough before the technology fundamentally alters, or even kills, its traditional business model.