UPDATE: Wedbush Reiterates Outperform Rating, Raises PT on Interpublic Group of Companies Ahead of 4Q12 Report
In a report published Wednesday, Wedbush reiterated its Outperform rating on Interpublic Group of Companies (NYSE: IPG), and slightly raised its price target from $12.75 to $13.50.
Wedbush noted, “We reaffirm our OUTPERFORM rating on shares of Interpublic Group (IPG-$13.25 PT), as an advertising agency holding company that is a play on a global marketing recovery, with additional company-specific upside as IPG's operational and financial turnaround proceeds. There are numerous specific catalysts that should drive the shares, including: 1) relatively high revenue exposure to U.S. and emerging markets, as opposed to ailing Western Europe; 2) IPG enters 2013 with much less drag from account losses than it had entering 2011 and 2012, 3) the improving position of ad agencies in the value chain, given complexities in managing the mix among paid, owned, and earned media; 4) margin upside assuming continued global media and marketing spending growth as post-recession rates; 5) the potential for an increase in returns of capital to shareholders, given improving free cash flow, falling leverage, and the relatively low likelihood for substantial M&A; and 6) valuation upside on EV/revenue.”
Interpublic Group of Companies closed on Tuesday at $12.58.
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