WPP Shares Hit With a Sell Rating as Analyst Sees Uncertain Path to Organic Growth

Goldman Sachs has initiated coverage of WPP (LON: WPP) with a Sell rating and a 240p price target, saying the advertising holding company faces limited visibility on a return to healthy organic growth under its current asset mix.

Analyst Adam Berlin acknowledged a broader recovery in advertising agency sector growth but said WPP is not well positioned to capitalize on it.

In a note to clients, Berlin stated that Goldman would become more positive on the shares if the company’s asset disposals were to lead to improved growth.

WPP shares closed at 264p on Wednesday, down 5.1% on the day. The stock has fallen 23% year to date and 54.7% over the past 12 months.

Goldman’s bearish initiation stands in contrast to a more optimistic view published last week by Rothschild & Co Redburn, which re-initiated coverage of WPP with a Buy rating and a 435p price target.

The firm believes WPP should post organic growth, improved margin and cash conversion in 2027 and 2028, and sees 60% upside in the shares from current levels.

The split in analyst views reflects uncertainty over whether WPP’s ongoing portfolio restructuring will be sufficient to reinvigorate growth.

While Goldman’s 240p target is below the current share price, implying further downside, Rothschild & Co Redburn’s 435p target suggests the stock is significantly undervalued if a recovery takes hold.