Wedbush Raises Price target on Omnicom Group (OMC) Following 1Q Review
Wedbush reiterated a Neutral rating on Omnicom Group (NYSE: OMC), and raised the price target to $86.00 (from $85.00), following a 1Q review. OMC reaffirmed ~3-3.5% 2016 organic growth outlook, and said it was on track to 2016 margin targets. 1Q EPS was reported at $0.90, ahead of the Street's estimate of $0.87. U.S., media, China and India look to be the 2016 drivers, with mixed geographic performance elsewhere.
Analyst James Dix commented, "While U.S. delivered upside, as previewed, we see modest share upside from current levels, given Street is already assuming more 2017 margin expansion. We continue to model 10bps of margin expansion in 2017, on more muted impact of the initiatives driving the 30bps of margin expansion guided for 2016, primarily in IT, real estate (where consolidations can be lumpy), back office, and strategic purchasing. We see Street estimates coming up towards ours, but think our target valuation at premium to market P/E leaves modest reward/risk."
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Shares of Omnicom Group closed at $84.74 yesterday.