We initiate IPG at Strong Buy, $39 PT. The Interpublic Group is a global advertising and marketing services provider via Integrated Agency Networks and IPG DXTRA, with a wide spectrum of capabilities across digital marketing, PR, data-driven communications.
Our conviction is based on three key tenets:
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IPG's earnings profile is at/near a cyclical trough with our 2025 EPS of $2.17 (19% below consensus) based on continued organic headwinds (down 3.6% in 1Q), $203mn of restructuring, and management's conservative guide on margin recovery;
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Consensus includes aggressive 2025 cost-out benefits, while our timeline for meaningful margin expansion remains in 2026/beyond, supported by historical restructuring track record and management disclosure;
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Importantly, even on our deliberately conservative estimates, applying a 15X forward P/E (on 2026E vs. 17.3X today, a stretched multiple well above peers) provides a path to $39/share.
Risks from protracted client account losses and slower organic growth remain, but this should be adequately reflected in valuation and our numbers.
Bottom line: With sentiment too focused on near-term pain, IPG's earnings power and cost discipline story offers compelling R/R, warranting clear action at current levels.
Liquidity Is King: IPG’s Balance Sheet Firepower Drives Shareholder Value Amid the Noise
This is the engine room: IPG's AI-driven platform leadership is quickly changing the marketing services competitive landscape, setting the stage for transformational value creation in the decade ahead.