Investing.com -- Goldman Sachs on Monday upgraded advertising group Stagwell to "buy" from "neutral" and set a $13 12-month price target, citing strong new business wins in its marketing services and digital transformation businesses.

Goldman, which initiated coverage, said Stagwell secured $312 million of new revenue in the first half of 2026, roughly matching rival Publicis despite having about one-seventh of its total revenue.

The brokerage expects Stagwell’s organic net revenue to grow about 8% annually from 2026 to 2028, ahead of the roughly 6% consensus forecast. It sees digital transformation and advocacy as key growth drivers, supported by continued gains in new business.

Stagwell’s media and commerce business remains a weak spot, with organic growth under pressure for six consecutive quarters. Goldman expects the division to improve as Stagwell invests in a new technology platform and brings in senior management, forecasting about 5% annual growth through 2030.

The brokerage expects adjusted EBITDA of $502 million in 2026, slightly below the $507 million consensus estimate. Its $13 target implies a 2027 enterprise value-to-EBITDA multiple of about eight times.

Goldman said Stagwell could command a premium to larger advertising groups because of its faster growth, business mix and exposure to digital transformation, as well as potential support from its advocacy operations.

Stagwell shares have risen 77% so far this year, Goldman said.

Goldman also initiated coverage of Havas at "neutral" with a €19 price target, citing concerns over the growth prospects of its media business.

The brokerage expects Havas to deliver organic growth of 2.4% in 2026 and 2.1% in 2027, alongside margin expansion. But it sees limited structural growth in creative, which accounted for 42% of Havas’ 2025 sales.

Media represented 38% of Havas’ revenue, but Goldman said the business lacks scale in the United States and could be vulnerable to market-share losses. It said Havas’ joint venture with Horizon Media is currently too small to have a material financial impact.

Goldman said the advertising sector is outperforming the broader market in 2026, with media revenue growth at the three largest agency groups accelerating to about 6% in the second quarter from 3% in 2025. Independent digital-focused agencies are increasingly winning business from larger groups, adding competitive pressure.

Goldman identified advertising-spending sensitivity, competition and volatility in political advertising revenue as key risks to its Stagwell view.

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