Goldman Sachs initiated coverage of WPP at sell Wednesday morning, assigning a 270p target and sending shares down 4.5% to 265.6p by mid-session. The bank opened simultaneous buy ratings on Publicis and Omnicom, marking the first formal divergence in sell-side positioning across the three legacy holding companies since the collapse of the Omnicom-Publicis merger attempt in 2014.
The call isolates WPP as the structural loser in a sector Goldman expects to grow low-single-digits through 2026. The bank's European media team cited three pressure points: decelerating client spending in technology and consumer packaged goods, WPP's slower pivot to performance marketing compared to Publicis, and what Goldman termed "organizational complexity" following CEO Mark Read's 2018 restructuring. WPP's revenue declined 3.2% in 2023 and is expected to stay flat through the first half of 2025, according to consensus estimates compiled by Bloomberg. Publicis, by contrast, grew 5.1% last year and trades at a 15% premium to WPP on an EV-to-EBITDA basis.
The divergence matters because it signals where family offices and sovereign wealth allocators should concentrate exposure if they want holding-company equity at all. Publicis has absorbed $4.2 billion in technology acquisitions since 2019, including Epsilon's data unit and Sapient's commerce division, giving it a margin profile Goldman estimates will reach 18% by 2026 versus WPP's projected 15%. Omnicom's buy rating rests on its healthcare and precision-marketing divisions, which now represent 38% of revenue and carry EBITDA margins near 22%. WPP's comparable health vertical sits at 11% of revenue. Goldman's model assumes WPP's organic growth lags Publicis by 200 basis points annually through 2027, a gap wide enough to justify permanent multiple compression.
The timing is precise. WPP reports full-year results in March 2025, and Goldman expects guidance to disappoint on both revenue growth and margin expansion. Allocators should watch whether Read accelerates M&A or announces a deeper cost program—his November 2024 investor day outlined $500 million in annualized savings by 2026, but Goldman's note implies that target is already priced in. Publicis, which Goldman set at a €130 target from €106 at close, trades near its highest multiple since 2007. Omnicom's $105 target implies 18% upside from current levels.
WPP's board meets in April to review strategic options. If Goldman's thesis holds, the choice becomes whether to sell the data and technology units piecemeal or accept that the London structure underperforms indefinitely. The bank's sector coverage resumes after a nine-year hiatus.