Nomura Securities on U.S. Media Agencies: Q2 Preview - Cutting Estimates on IPG and OMC
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Rating Summary:
10 Buy, 3 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
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Nomura Securities on U.S. Media Agencies: Q2 Preview
Analyst, Michael Nathanson, said, "When the year started, the U.S. based agencies guided to the negative influence of FX in 2012. However, over the past quarter, exchange rates, especially Latin American and European currencies, have declined dramatically on a Y/Y basis. The Brazilian Real has declined by 18% Y/Y while the Euro has declined by 11% Y/Y."
"Given that 55% and 51% of Interpublic Group (NYSE: IPG) and Omnicom Group's (NYSE: OMC) revenues are derived outside of the U.S., we now model FX on a total company basis to be a decline of -2.6% in 2Q for IPG (vs. -1.7% previously) and -3.7% for OMC (vs. -3.0% previously)."
For OMC, Nomura lowers Q2 EPS from $1.05 to $1.03 and FY12 from $3.72 to $3.68. FY13 cut from from $4.25 to $4.20. Price target also lowered from $55 to $52.
For IPG, Nomura lowers FY12 EPS estimate from $0.85 to $0.83 and FY13 from $1.02 to $0.99.
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Analyst, Michael Nathanson, said, "When the year started, the U.S. based agencies guided to the negative influence of FX in 2012. However, over the past quarter, exchange rates, especially Latin American and European currencies, have declined dramatically on a Y/Y basis. The Brazilian Real has declined by 18% Y/Y while the Euro has declined by 11% Y/Y."
"Given that 55% and 51% of Interpublic Group (NYSE: IPG) and Omnicom Group's (NYSE: OMC) revenues are derived outside of the U.S., we now model FX on a total company basis to be a decline of -2.6% in 2Q for IPG (vs. -1.7% previously) and -3.7% for OMC (vs. -3.0% previously)."
For OMC, Nomura lowers Q2 EPS from $1.05 to $1.03 and FY12 from $3.72 to $3.68. FY13 cut from from $4.25 to $4.20. Price target also lowered from $55 to $52.
For IPG, Nomura lowers FY12 EPS estimate from $0.85 to $0.83 and FY13 from $1.02 to $0.99.
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