PARIS (Reuters) - Publicis (PUBP.PA) shares slumped on Friday after the world’s third-biggest advertising group cut its 2019 revenue growth guidance.
Publicis was down 7.5% at 43.88 euros in early session trading in Paris, with the stock touching its lowest level since December 2012, and its woes also affected British rival WPP (WPP.L) whose shares also fell 1.5%.
Late on Thursday Publicis, whose revenue is being squeezed by competition from Facebook (FB.O) and Google (GOOGL.O) as well as tightening advertising budgets by major clients, said it now expected a “broadly stable net revenue” in 2019, excluding the impact of acquisitions and foreign exchange.
Publicis had previously forecast higher organic revenue growth in 2019 than in 2018, but gave no precise figure.
Brokerage Liberum downgraded Publicis to “hold” from “buy”.
“Operationally, the weakness in North America is the biggest concern given Publicis is the strongest player in North American media buying, which should be the highest margin part of the business and we now have two major agencies (WPP and Publicis) both having weakness in North America, which raises questions as to what is happening in this particular market,” wrote Liberum.
Reporting by Sudip Kar-Gupta; Editing by Dominique Vidalon