Broker snap: WPP makes 'bold move' by upping guidance

3rd May 2011 12:15

Nomura raises its earnings forecasts for advertising firm WPP after last week's "bold move" to hike its full year guidance."Given all the uncertainties about input prices, sovereign debt, austerity, the US deficit, the political changes in the Middle East and the events in Japan, choosing the first quarter results to raise the 2011 full year organic growth objective to 6% from 5% is a punchy move which serves to differentiate WPP from peers but also piles on the pressure to make the numbers," said analyst Matthew Walker.The Japanese broker raises its earnings per share forecasts for 2011 and 2012 by 1.6% and 3.2, respectively, but notes one word of caution: organic growth in the current quarter needs to be above 6% for the full year guidance to remain plausible (given tougher comparatives).A 'buy' and target price of 1,000p are retained.---BC