Publicis is the third-largest advertising agency group in the world by revenues. Its main agency networks are Publicis Worldwide, Leo Burnett, and Saatchi & Saatchi (all Creative), Starcom and Zenith (both Media), Publicis Health (Healthcare), Epsilon (CRM) and Sapient (Business Transformation Consulting). Under the Publicis Power of One plan, it has now aggregated its activities into four units: Communications (Creative), Media (Media Buying), Healthcare, and Digital.
Investment Thesis:
- The shock from COVID creates the opportunity for gradual early cycle recovery spread over 2022-24 and a return to growth after a number of years of sub-par growth. Persistent setbacks mean investor confidence is low, although it has been enhanced by better-than-expected resistance during the pandemic. The share price is trading below trough multiples once again; a trough valuation would imply a share price of EUR55.