Zacks Research Downgrades Omnicom Group (NYSE:OMC) to Strong Sell

Omnicom Group (NYSE:OMC) was downgraded by research analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a research report issued on Thursday,Zacks.com reports.

Several other equities research analysts also recently commented on OMC. Morgan Stanley increased their price objective on Omnicom Group from $82.00 to $83.00 and gave the company an “equal weight” rating in a report on Friday, May 1st. The Goldman Sachs Group started coverage on shares of Omnicom Group in a research report on Wednesday, June 3rd. They set a “buy” rating and a $146.00 price target on the stock. Citigroup dropped their target price on shares of Omnicom Group from $105.00 to $100.00 and set a “buy” rating on the stock in a report on Thursday. Wells Fargo & Company raised their target price on shares of Omnicom Group from $91.00 to $93.00 and gave the company an “overweight” rating in a research note on Thursday. Finally, Rothschild & Co Redburn began coverage on Omnicom Group in a report on Thursday, May 28th. They set a “neutral” rating and a $89.00 price target for the company. Four research analysts have rated the stock with a Buy rating, five have given a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat, Omnicom Group currently has a consensus rating of “Hold” and an average price target of $99.00.

Omnicom Group Stock Performance

Shares of NYSE OMC opened at $78.86 on Thursday. The stock has a 50 day moving average price of $77.29 and a 200 day moving average price of $76.89. Omnicom Group has a 52 week low of $66.33 and a 52 week high of $87.41. The company has a debt-to-equity ratio of 0.97, a quick ratio of 0.77 and a current ratio of 0.92. The stock has a market capitalization of $21.64 billion, a PE ratio of 67.98, a price-to-earnings-growth ratio of 0.53 and a beta of 0.63.

Omnicom Group (NYSE:OMC) last posted its quarterly earnings results on Tuesday, July 28th. The business services provider reported $2.65 earnings per share for the quarter, missing analysts’ consensus estimates of $2.67 by ($0.02). The company had revenue of $6.56 billion during the quarter, compared to the consensus estimate of $6.44 billion. Omnicom Group had a net margin of 1.74% and a return on equity of 24.73%. The firm’s revenue for the quarter was up 63.4% compared to the same quarter last year. During the same quarter in the prior year, the business earned $2.05 earnings per share. Analysts predict that Omnicom Group will post 10.35 earnings per share for the current fiscal year.

Hedge Funds Weigh In On Omnicom Group

Institutional investors and hedge funds have recently modified their holdings of the stock. Vanguard Group Inc. boosted its holdings in Omnicom Group by 64.2% in the 4th quarter. Vanguard Group Inc. now owns 38,934,118 shares of the business services provider’s stock valued at $3,143,930,000 after purchasing an additional 15,220,444 shares during the period. State Street Corp grew its holdings in shares of Omnicom Group by 40.4% during the 4th quarter. State Street Corp now owns 23,676,768 shares of the business services provider’s stock worth $1,933,891,000 after purchasing an additional 6,813,441 shares in the last quarter. Bank of New York Mellon Corp increased its position in shares of Omnicom Group by 69.6% in the fourth quarter. Bank of New York Mellon Corp now owns 11,283,863 shares of the business services provider’s stock worth $911,172,000 after purchasing an additional 4,631,394 shares during the period. Wellington Management Group LLP raised its stake in Omnicom Group by 522.9% in the fourth quarter. Wellington Management Group LLP now owns 5,199,477 shares of the business services provider’s stock valued at $419,858,000 after purchasing an additional 4,364,797 shares in the last quarter. Finally, Geode Capital Management LLC lifted its position in Omnicom Group by 57.1% during the fourth quarter. Geode Capital Management LLC now owns 8,578,075 shares of the business services provider’s stock worth $690,327,000 after purchasing an additional 3,117,188 shares during the period. 91.97% of the stock is currently owned by institutional investors and hedge funds.

Omnicom Group News Roundup

Here are the key news stories impacting Omnicom Group this week:

• Positive Sentiment: Wells Fargo raised its price target for Omnicom Group to $93 from $91 and maintained an “overweight” rating, citing potential upside from the company’s operating outlook. Wells Fargo price-target update
• Positive Sentiment: Citigroup lowered its target to $100 from $105 but retained a “buy” rating. The reduced target still implies substantial upside and suggests analysts view the recent weakness as an opportunity rather than a fundamental break in the investment case. Citigroup price-target update
• Positive Sentiment: Analysts highlighted Omnicom’s data and analytics investments, integrated media capabilities and merger-related cost synergies as potential drivers of longer-term revenue growth and profitability. Omnicom data and analytics outlook
• Neutral Sentiment: Omnicom’s latest quarter produced $6.56 billion in revenue, above the $6.44 billion consensus and up 63.4% year over year, while EPS of $2.65 narrowly missed the $2.67 estimate. The mixed result helps explain why strong sales growth has not translated into a clear stock catalyst. Omnicom Q2 earnings call highlights
• Neutral Sentiment: International revenue remains an important factor in Wall Street’s forecasts, making foreign-market performance and currency or regional risks relevant to the stock’s outlook. Omnicom international revenue analysis
• Negative Sentiment: Investors remain concerned about higher debt, integration expenses and margin pressure following the merger. Analysts have also trimmed estimates, creating uncertainty over how quickly anticipated synergies will improve earnings. Omnicom valuation analysis
• Negative Sentiment: Some commentary argues that OMC’s valuation and recent multiyear gains leave the shares vulnerable to profit-taking if organic growth or post-merger execution disappoints. Omnicom valuation commentary

About Omnicom Group

Omnicom Group Inc (NYSE: OMC) is a global marketing and corporate communications holding company headquartered in New York City. Founded in 1986 through the merger of the BBDO, DDB and Needham Harper agencies, Omnicom has built a portfolio of leading brands and networks serving clients across diverse industries.

The company’s primary business activities encompass advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and customer relationship management.