Interpublic Group of Companies (IPG) reiterates its Outperform recommendation based on strong growth opportunity and market optimism. Riding high on digital capabilities, diversified business model and extended geographic reach, our optimism holds good and keeps the stock beyond range.
Recent growth in U.S is driven by improved GDP and positive job recovery. Interpublic Group can certainly leverage on such improvement and reach beyond. The worldwide dynamism along with the rapidly developing interactive technologies provide room for the groups’ probable ventures into the high-growth markets of China, India and Brazil, and even beyond the U.S
Interpublic Group operates in a sophisticated digital media ecosystem, which offers traditional advertising and marketing services. The group’s powerful global networks deliver service across 100 world markets providing distinctive quality of service to clients– a competitive advantage over peers, such as Omnicom Group Inc. (OMC), Publicis Groupe SA (PUBGY), WPP plc (WPPGY).
In order to ensure world class service delivery, Interpublic Group hires best-in-industry talent and tools–strategically customized to offer optimal and affordable solution in a dynamic media and marketing environment.
Moreover, technological collaboration/integration and investment in new business look impressive and are expected to expand the company’s global reach and induce profitability. The company’s strict cost control strategy counters rising cost pressures and is purposefully designed to achieve margin targets of at least 50 basis points of improvement in 2012.
Further, the world’s third largest advertising agency remains committed to its shareholders, which is reflected in its efforts in timely disbursement of dividends and authorization of new share repurchase program.
Interpublic Group maintains a Zacks #2 Rank, which implies a short-term (1-3 months) ‘Buy’ rating.
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