WPP on an Acquisition Spree - Analyst Blog
May 22 2012 - 7:30AM
Zacks
Ireland-based advertising
agency WPP Group Plc. (WPPGY) recently
penned a contract to acquire stake in a Myanmar based advertising
firm, Today Advertising Corporation. The acquisition will be given
effect through the company’s wholly-owned global advertising and
communications entity, Ogilvy & Mather. The financial terms of
the agreement were not disclosed.
The strategic acquisition supports
the company’s expansionary plans and operations in fast growing
emerging markets and allows the company to access the vast untapped
markets in these regions. Besides, WPP Plc also targets operational
expansions in a total of 108 countries through its various
acquisition activities.
In the first 5 months of 2012, WPP
plc’s wholly-owned operating companies carried out a series of
acquisitions. Among these, Kantar’s $1.2 million investment in
Enprecis, Burson-Marsteller’s acquisition of assets of Crowdverb
and Carnation Internet Tanácsadó Zrt deserve special mention. These
acquisitions are expected to have a positive impact on the
company’s growth prospects.
Earlier, in the first quarter of
fiscal 2012, WPP Plc witnessed about 7.6% augmentation in revenue
from the prior-year quarter. Geographically, the company fared well
posting a noticeable growth of 11.2% in Asia Pacific, Latin
America, Africa, the Middle East and Central & Eastern European
regions. Additionally, revenues from the company’s Asia-Pacific
businesses were around $4 billion.
The company established itself in
the diverse markets through providing advertising and other
specialty communications services globally but it should be aware
of the stiff competition from its rivals. It directly competes with
its peers, such as Local.com Corporation (LOCM),
AirMedia Group Inc. (AMCN) and Clear
Channel Outdoor Holdings Inc. (CCO).
The current Zacks Consensus EPS
Estimates for WPP plc are $5.57 and $6.23 for the fiscal years 2012
and 2013, respectively. The company currently carries a Zacks #3
Rank which denotes a short-term (1-3 months) ‘Hold’ rating. We
currently maintain a Neutral recommendation on the stock.
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WPP PLC (WPPGY): Free Stock Analysis Report
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