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1. Company Snapshot

1.a. Company Description

The Interpublic Group of Companies, Inc.provides advertising and marketing services worldwide.It operates in two segments, Integrated Agency Networks (IAN) and IPG DXTRA.


The company offers consumer advertising, digital marketing, communications planning and media buying, public relations, and specialized communications disciplines, as well as data science services.It also provides various diversified services, including meeting and event production, sports and entertainment marketing, corporate and brand identity, and strategic marketing consulting.The company was formerly known as McCann-Erickson Incorporated and changed its name to The Interpublic Group of Companies, Inc.


in January 1961.The Interpublic Group of Companies, Inc.was founded in 1902 and is headquartered in New York, New York.

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1.b. Last Insights on IPG

The Interpublic Group of Companies, Inc.'s recent performance is driven by several positive factors. The company's Q2 2025 earnings beat estimates, with a 23% year-over-year EPS growth, and reported a record 18.1% adjusted EBITDA margin. Additionally, its dividend yield of nearly 5% and proven dividend growth enhance its appeal to investors. The company's progress on its merger with Omnicom, with regulatory approvals in most jurisdictions, also contributes to its positive outlook. Furthermore, IPG's agencies, such as Initiative, have secured top rankings in global new business, and the company has won significant accounts, including Bayer's global media, production, and creative agency partnership.

1.c. Company Highlights

2. IPG's Q2 2025 Earnings: A Mixed Bag

Interpublic Group's (IPG) Q2 2025 earnings report revealed a 3.5% decline in organic revenue, consistent with the company's revenue outlook. The decrease was largely due to the impact of account activity that concluded in 2024, which weighed on growth by approximately 5.5%. Adjusted EBITDA was $393.7 million with a margin of 18.1%, reflecting significant structural cost reduction due to the company's program of strategic transformation. Earnings per share (EPS) came in at $0.75, beating estimates of $0.55. The company's revenue decline was partially offset by strong increases in food and beverage, financial services, and tech and telecom sectors.

Publication Date: Jul -28

📋 Highlights
  • Organic Revenue Decline: Q2 2025 organic revenue decreased by 3.5%, reflecting the impact of prior account losses.
  • Adjusted EBITDA Performance: Achieved $393.7 million in adjusted EBITDA with an 18.1% margin, driven by structural cost reductions.
  • Shareholder Returns: Returned $98 million to shareholders via buybacks, with $188 million returned year-to-date.
  • Full-Year Outlook: Expects a 1-2% organic revenue decline for 2025, with adjusted EBITDA margin exceeding 16.6%.
  • Cost Savings Progress: Targets $300 million in-year savings, with a run rate above $300 million from restructuring initiatives.

Financial Performance

The company's financial performance was mixed, with a decline in organic revenue but an increase in adjusted EBITDA margin. The 18.1% adjusted EBITDA margin reflects the company's efforts to reduce costs and improve operational efficiency. According to Philippe Krakowsky, IPG's model can deliver better operational leverage than historically, with a focus on technology-driven efficiency.

Segment Performance

IPG's integrated advertising and creativity segment faced idiosyncratic losses, but the healthcare specialty business is performing well. The company is focusing on connecting creative work to data and outcomes, with outcome-based components on the media side baked into more than 50% of contracts. This shift towards outcome-based work is seen as an opportunity to drive growth and deliver business outcomes for clients through a combination of creative, data, and technology.

Valuation and Outlook

At current prices, IPG trades at a P/E ratio of 21.56, a P/B ratio of 2.66, and a P/S ratio of 0.92. The EV/EBITDA ratio is 8.57, and the dividend yield is 5.1%. Analysts estimate next year's revenue growth at 2.9%. With a strong track record of cost reduction and a focus on technology-driven efficiency, IPG's valuation metrics suggest that the stock may be attractively priced. As Krakowsky mentioned, the combination with Omnicom is expected to create a powerful entity, particularly with IPG's data assets and Omnicom's commerce capabilities.

Merger and Acquisition

The proposed acquisition by Omnicom is on track to be completed in the second half of the year, with antitrust clearance secured in all but four jurisdictions required. The merger is expected to create a comprehensive platform, with strengths in data, commerce, and geography. While the industry is rapidly evolving, IPG believes its new entity will be well-positioned to invest and adapt.

3. NewsRoom

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Hsbc Holdings PLC Sells 156,345 Shares of Interpublic Group of Companies, Inc. (The) $IPG

Dec -03

Source: defenseworld.net

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Market Today: Crypto Rout, Omnicom Cuts, Nvidia--Synopsys Deal

Dec -01

Source: gurufocus.com

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Omnicom to cut over 4,000 jobs and shutter legacy ad agencies after IPG acquisition

Dec -01

Source: fastcompany.com

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Omnicom's CEO breaks down his plan to beat rivals in AI after the ad giant's blockbuster $9 billion IPG deal

Dec -01

Source: businessinsider.com

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Ad giant Omnicom says its mega-merger with IPG will lead to 4,000 job cuts

Dec -01

Source: businessinsider.com

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Omnicom to cut 4,000 jobs, shut several agencies after IPG takeover, FT reports

Dec -01

Source: reuters.com

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Omnicom Closes Acquisition Of Interpublic In $13B Deal Creating World's Largest Advertising Firm

Nov -26

Source: deadline.com

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A Madison Avenue makeover: Omnicom's $9 billion merger with IPG is complete

Nov -26

Source: businessinsider.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.03%)

6. Segments

Media, Data & Engagement

Expected Growth: 2.5%

The Interpublic Group of Companies, Inc.'s 2.5% growth in Media, Data & Engagement is driven by increasing demand for digital marketing services, expansion of data analytics capabilities, and growth in social media engagement platforms. Additionally, strategic acquisitions and partnerships have enhanced the company's offerings, contributing to the segment's growth.

Integrated Advertising & Creativity Led

Expected Growth: 1.8%

Integrated Advertising & Creativity Led segment's 1.8% growth is driven by increasing demand for omnichannel marketing solutions, expansion of digital capabilities, and strategic acquisitions. Additionally, the company's focus on data-driven creative solutions, content marketing, and experiential marketing also contribute to the growth.

Specialized Communications & Experiential

Expected Growth: 1.2%

The 1.2% growth in Specialized Communications & Experiential is driven by increasing demand for experiential marketing, growth in events and activations, and expansion of digital capabilities. Additionally, the segment benefits from IPG's diversified client base, strategic acquisitions, and investments in emerging technologies.

7. Detailed Products

Advertising

The Interpublic Group of Companies, Inc. offers advertising services that help clients build and maintain their brands through creative and strategic campaigns.

Digital Marketing

IPG provides digital marketing services that help clients navigate the digital landscape and connect with their target audience through digital channels.

Media Planning and Buying

IPG offers media planning and buying services that help clients reach their target audience through strategic media placement and negotiation.

Public Relations

IPG provides public relations services that help clients build and maintain a positive reputation through strategic communications and crisis management.

Digital Transformation

IPG offers digital transformation services that help clients adapt to the changing digital landscape and stay ahead of the competition.

Data Analytics

IPG provides data analytics services that help clients make data-driven decisions and optimize their marketing strategies.

Content Creation

IPG offers content creation services that help clients develop engaging and effective content that resonates with their target audience.

8. The Interpublic Group of Companies, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Interpublic Group of Companies, Inc. is medium due to the presence of alternative advertising agencies and marketing firms that offer similar services.

Bargaining Power Of Customers

The bargaining power of customers for The Interpublic Group of Companies, Inc. is low due to the company's diversified client base and the lack of concentration of clients.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Interpublic Group of Companies, Inc. is medium due to the presence of multiple suppliers of media and technology services.

Threat Of New Entrants

The threat of new entrants for The Interpublic Group of Companies, Inc. is low due to the high barriers to entry in the advertising and marketing industry, including the need for significant capital investment and a strong reputation.

Intensity Of Rivalry

The intensity of rivalry for The Interpublic Group of Companies, Inc. is high due to the presence of several large and established competitors in the advertising and marketing industry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.66%
Debt Cost 8.89%
Equity Weight 51.34%
Equity Cost 9.57%
WACC 9.24%
Leverage 94.78%

11. Quality Control: The Interpublic Group of Companies, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Nexstar Media

A-Score: 7.3/10

Value: 7.0

Growth: 8.2

Quality: 7.6

Yield: 7.0

Momentum: 7.0

Volatility: 6.7

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Growth: 5.8

Quality: 6.7

Yield: 5.0

Momentum: 9.0

Volatility: 5.0

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Deluxe

A-Score: 5.8/10

Value: 7.9

Growth: 3.3

Quality: 4.6

Yield: 9.0

Momentum: 5.0

Volatility: 4.7

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Omnicom Group

A-Score: 5.7/10

Value: 6.6

Growth: 4.2

Quality: 5.5

Yield: 8.0

Momentum: 2.0

Volatility: 7.7

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A-Score: 5.5/10

Value: 9.3

Growth: 3.7

Quality: 4.6

Yield: 9.0

Momentum: 1.0

Volatility: 5.3

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Interpublic

A-Score: 5.3/10

Value: 5.5

Growth: 3.7

Quality: 4.6

Yield: 8.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

24.57$

Current Price

24.57$

Potential

-0.00%

Expected Cash-Flows