HSBC downgrades WPP to Hold into difficult first half of 2024

HSBC downgraded WPP to Hold from Buy with a 790 GBp price target. The analyst says that while the shares look cheap, the first half of 2024 looks difficult for the company with growth only seen toward the back end, putting its 2024 guidance at risk. While organic growth gap between at WPP and Publicis can be partly justified by sector, geography and capability, it can’t explain it all, suggesting a “Publicis premium,” the analyst tells investors in a research note. HSBC believes the valuation gap between the two companies should narrow as the technology sector recovers since its weakness hit WPP harder, but says a “gap will remain nonetheless.”