Broker snap: WPP trading at discount to peers

12th Jun 2009 13:23

The 6.7% drop in like-for-like sales in the first four months of 2009 announced by advertising and marketing giant WPP last week has not deterred Goldman Sachs from adding the stock its conviction buy list.Goldman Sachs (GS) said that although WPP's sales figures were bad, they could be close to bottoming out, as businesses begin to ratchet up marketing spend in the second half of the year to coincide with an expected revival in the economy.GS analyst Richard Jones believes that with around one-fifth of the company's sales now generated in emerging markets, the company is well placed to benefit from the global recovery. Jones is sticking with his prediction of 8% organic growth for WPP this year, based in part on an increase in the order pipeline.In comparison with rivals Publicis and Omnicom, the share's price/earnings ratio is around 20% lower than the former and 30% lower than the latter.