WPP share price has been in a freefall this year, making it one the top laggards in the UK stock market. It dropped to a low of 265p in November, down by 68% from its highest level in 2024. It is now hovering near its lowest level since 2021 and is down by 75% from its all-time high.
WPP stock price has crashed because of the AI disruption
WPP, the biggest player in the advertising and public relations industry, has come under pressure in the past few years as concerns about the AI disruption have remained.
This disruption has affected most of its businesses, including popular brands like Ogilvy, VML, Grey, and MindShare. It has also made it to exit the blue-chip FTSE 100 Index, which tracks the biggest companies in the UK.
The most recent results showed that WPP’s business continued to deteriorate in the third quarter, which the management blamed on client losses and client spending cuts.
Its revenue dropped by 8.4% to £3.2 billion, while its revenue less pass-through costs dropped by 11.1% to £2.49 billion. This slowdown brought the year-to-date revenue to £9.92 billion, down by 8% from the same period.
Worse, the management warned that the annual revenue will be worse than its previous guidance, continuing a weakness that has been going on for years. It now expects that the like-for-like growth for the year will be between minus 5.5% to 6.0%.
All businesses in its ecosystem remained under pressure during the quarter. It’s Global Integrated Agencies, which is made up of its media planning and buying businesses, saw its revenue drop, with the company blaming its weak performance in Germany and China.
The same decline happened in its public relations and its specialist agencies businesses. This is also happening across its geographical regions, with North America, the UK, Europe, and the rest of the world.
WPP’s slowdown will likely continue in the foreseeable future as the advertising and marketing industries change. Today, most companies are focusing their advertising budgets on the digital segment, an area where WPP is struggling to monetize.
WPP has become cheap and a buyout target
On the positive side, the ongoing WPP share price crash has made it a cheap company trading with a forward price-to-earnings ratio of just 5.
This cheapness may make it a good acquisition target. Just recently, there were rumors that it was eying a merger with Havas, in a deal that would be backed by private equity companies.
Hopes for a deal rose after the merger of Omnicom and IPG, two of its biggest competitors. Omnicom is now planning to cut 4,000 jobs and shutter some of IPG’s ad firms, a move intended to make it a more formidable competitor to WPP.
WPP would likely make a good buyout target because of the potential to improve its operations through intrabrand mergers. It also has over 104,000 employees globally and a presence in low-profitable markets.
WPP share price technical analysis
The weekly timeframe chart shows that the WPP stock price has been in a strong bearish trend in the past few years. It has collapsed from the pandemic high of 1,004p in 2022 to the current 335p, a move that has erased billions of pounds in value.
WPP stock dropped below the key support level at 584p, its lowest level in September 2022 and October 2023. It remains below all moving averages.
Therefore, the most likely WPP share price forecast is mildly bullish with the hope that it will receive an acquisition offer in 2026. However, the stock may keep falling if a deal does not materialize.
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