Omnicom Group Inc. (OMC) Downgraded to Hold at Zacks Investment Research

Zacks Investment Research lowered shares of Omnicom Group Inc. (NYSE:OMC) from a buy rating to a hold rating in a report published on Monday, July 31st.

According to Zacks, “Omnicom recorded relatively modest second-quarter 2017 results as earnings increased year over year although revenues declined. The increasing demand for media services, speedy growth of technologies and massive proliferation of channels are likely to improve the top line in the future. Stringent cost-cutting initiatives have further helped Omnicom to boost its margins in the quarter. The company outperformed the industry year to date. However, a competitive and fragmented communications services industry coupled with high susceptibility to concentration risks pose a threat to Omnicom’s profitability. Brexit could further result in higher tariff and non-tariff barriers to trade between the U.K. and the European Union, lowering its productivity. Moreover, as Omnicom expands its international operations, it highly exposes itself to risks from foreign exchange barriers and uncertainty from monetary devaluation with strength in U.S. dollars.”

Several other research firms have also weighed in on OMC. Evercore ISI began coverage on shares of Omnicom Group in a research note on Monday, April 17th. They set an in-line rating and a $91.00 target price for the company. They noted that the move was a valuation call. Royal Bank Of Canada restated a buy rating and set a $101.00 price target on shares of Omnicom Group in a research report on Tuesday, April 11th. Macquarie downgraded shares of Omnicom Group from an outperform rating to a neutral rating and reduced their price objective for the stock from $90.00 to $83.00 in a report on Tuesday, June 6th. Barclays PLC reaffirmed a hold rating and issued a $86.00 price objective on shares of Omnicom Group in a report on Thursday, April 20th. Finally, Wedbush cut their price target on shares of Omnicom Group from $90.00 to $89.00 and set a neutral rating for the company in a report on Wednesday, April 19th. Two research analysts have rated the stock with a sell rating, eleven have given a hold rating and one has issued a buy rating to the company. Omnicom Group presently has an average rating of Hold and an average price target of $86.00.

Shares of Omnicom Group (NYSE:OMC) traded down 1.15% during mid-day trading on Monday, reaching $76.76. 1,402,601 shares of the company’s stock traded hands. The company’s 50-day moving average price is $80.03 and its 200-day moving average price is $83.10. Omnicom Group has a 12-month low of $76.74 and a 12-month high of $89.66. The stock has a market capitalization of $17.71 billion, a PE ratio of 15.50 and a beta of 1.25.

Omnicom Group (NYSE:OMC) last posted its quarterly earnings results on Thursday, July 20th. The business services provider reported $1.40 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.38 by $0.02. The firm had revenue of $3.79 billion for the quarter, compared to analysts’ expectations of $3.74 billion. Omnicom Group had a net margin of 7.61% and a return on equity of 42.54%. The firm’s quarterly revenue was down 2.4% on a year-over-year basis. During the same period in the prior year, the company posted $1.36 earnings per share. Analysts anticipate that Omnicom Group will post $5.08 earnings per share for the current year.

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The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, October 10th. Stockholders of record on Friday, September 22nd will be given a $0.55 dividend. The ex-dividend date is Thursday, September 21st. This represents a $2.20 annualized dividend and a dividend yield of 2.87%. Omnicom Group’s dividend payout ratio is 44.44%.

In related news, Chairman Bruce Crawford sold 22,800 shares of the firm’s stock in a transaction on Thursday, June 1st. The stock was sold at an average price of $84.91, for a total value of $1,935,948.00. Following the completion of the transaction, the chairman now directly owns 105,250 shares of the company’s stock, valued at $8,936,777.50. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, Director Linda Johnson Rice sold 483 shares of the firm’s stock in a transaction on Monday, July 24th. The stock was sold at an average price of $82.19, for a total value of $39,697.77. Following the completion of the transaction, the director now directly owns 7,724 shares of the company’s stock, valued at $634,835.56. The disclosure for this sale can be found here. Insiders sold 24,183 shares of company stock valued at $2,046,845 over the last three months. 1.10% of the stock is owned by company insiders.

Several hedge funds have recently made changes to their positions in the stock. BlackRock Inc. raised its stake in shares of Omnicom Group by 3,091.8% in the first quarter. BlackRock Inc. now owns 17,041,057 shares of the business services provider’s stock worth $1,469,108,000 after buying an additional 16,507,161 shares during the period. Janus Henderson Group PLC raised its stake in shares of Omnicom Group by 15,279.3% in the second quarter. Janus Henderson Group PLC now owns 4,996,274 shares of the business services provider’s stock worth $414,191,000 after buying an additional 4,963,787 shares during the period. Beutel Goodman & Co Ltd. acquired a new stake in shares of Omnicom Group during the second quarter worth $153,358,000. Nordea Investment Management AB raised its stake in shares of Omnicom Group by 501.5% in the second quarter. Nordea Investment Management AB now owns 2,201,826 shares of the business services provider’s stock worth $182,531,000 after buying an additional 1,835,749 shares during the last quarter. Finally, Alliancebernstein L.P. raised its stake in shares of Omnicom Group by 90.0% in the second quarter. Alliancebernstein L.P. now owns 2,652,302 shares of the business services provider’s stock worth $219,876,000 after buying an additional 1,256,005 shares during the last quarter. Institutional investors own 98.02% of the company’s stock.

Omnicom Group Company Profile

Omnicom Group Inc is a holding company. The Company provides advertising, marketing and corporate communications services. The Company’s branded networks and agencies operate in all markets around the world and provide a range of services, which it groups into four disciplines: advertising, customer relationship management (CRM), public relations and specialty communications.

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