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Omnicom Group Inc. Message Board

  • investora2z investora2z Sep 19, 2013 11:42 AM Flag


    Omnicom has made quite a recovery over the past few days. It is up more than 10% from the recent lows. This is good for the sentiments because the stock had corrected by more than 14% after the earnings. This was surprising as the earnings were better than expected. There was good growth in emerging markets which helped the company post marginal growth in revenues and net income. Importantly, the operating margins also expanded slightly. The stock may take a breather and correct a bit. This is indicated by the fact that the recent upward movement has not been supported by volumes. In any case, the stock is not far away from the 52 week high of $70.50, and that may be another major hurdle to cross. The stock is up 22% on a 52 week basis and is 45% above its 52 week low made in November. An article on SA had recently expressed confidence in the future prospects of the company, stating that it is likely to benefit from the rising demand for digital marketing. There are expected synergies from the merger with Publicis, and the company will become a leading media and communication company in the world. The enhanced digital capabilities will help it adapt to changing times, and improve its customer service. Expansion in Asian and Latin American markets will help the company improve its earnings per share even in the current year. There are also some negatives of the merger as Omnicom and Publicis serve rival customers, which may lead to loss of big accounts. Further, competition in the advertising industry is fragmented and companies need to adapt continuously to the changing landscape. IZEA (IZEA), a company in the social media sponsorship / native ads space, recently published results of a survey indicating the changed dynamics of online advertising. The exact impact of the merger will be known over the next many quarters and years.

84.55+0.17(+0.20%)Aug 26 4:02 PMEDT