OMC - Embedded Expectations Analysis - 2018 12 21
Omnicom Group Inc. (OMC:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 13.7x Uniform P/E, implying bearish expectations for the firm. Meanwhile, management has concerns about their Canadian advertising agencies, decreased cash levels, and their ability to transform their clients' digital operationsSpecifically, management may lack confidence in their ability to turn around recent weak performance of their advertising agencies in Canada, and to drive growth in the Middle East and Africa. Moreover, they may lack confidence in their assertion that clients recognize the value of their creative ideas, and may be concerned about their ability to transform the digital side of their clients' businesses. Additionally, they may be concerned about the reduction of revenue levels due to M&A activity in Q3 2018 and prior, and about the impact of changes in working capital on their cash flow. Finally, they may have concerns about the decrease in their cash balance
Omnicom Group is a holding company, engaged in providing advertising, marketing and corporate communications services. The company's networks and agencies provide a range of services in the following fundamental disciplines: advertising, customer relationship management, public relations and healthcare. The company's Service offerings include, among others, advertising, branding, content marketing, corporate social responsibility consulting, crisis communications, custom publishing, data analytics, database management, digital/direct marketing, digital transformation, entertainment marketing, experiential marketing, field marketing, financial/corporate business-to-business advertising, and imaging.
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