Omnicom Group Inc. 
OMCis a leading player in the global advertising, marketing and corporate communications sector with a market capitalization of approximately $19 billion. The New York-based company offers a broad range of services, including advertising, public relations and digital marketing, in major markets worldwide.
Shares of this advertising company have underperformed the overall market over the past 52 weeks. OMC has gained 21.3% during that time, while the broader S&P 500 Index ($SPX) has gained 28.3%. In 2024, OMC shares are expected to rise 12%, compared to SPX’s annualized gain of 17.6%.
Upon closer inspection, OMC’s underperformance relative to the S&P 500 Communication Sector SPDRs becomes more apparent. 
XLC 34.1% gain over the last 52 weeks and 20.1% return year to date.
Omnicom Group has underperformed over the past year due to weaker growth in key regions such as APAC and North America (excluding the US), challenges adapting to rapidly evolving digital advertising trends and competition from new Gen AI technologies. Although the stock beat Wall Street estimates for second-quarter earnings and revenue on July 16, it fell 4% the following day on concerns about slower growth in its precision marketing segment and fears about its ability to sustain high advertising spend in a potentially uncertain economic environment.
For the current fiscal year ending in December, analysts expect OMC’s earnings per share to rise 7.3% year over year to $7.95. The company’s history of earnings surprises is encouraging, with it beating consensus estimates for the past four quarters.
The eleven analysts covering the stock have a consensus rating of “Moderate Buy.” This is based on seven “Strong Buy” ratings, one “Moderate Buy” rating, two “Holds” ratings, and one “Moderate Sell” rating.
The configuration has remained unchanged over the past few months.
On July 18, UBS Group raised its price target on Omnicom Group to $120 – the highest price target on the Street – and reiterated its Buy rating. This implies a potential upside of 23.8% from the current price. The median price target of $107.90 represents a premium of 11.3% to OMC’s current price level.
As of the date of publication, Sohini Mondal had no position (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more information, please see Barchart’s disclosure policy here.
