Omnicom Group Inc. (NYSE:OMC) Given Average Rating of "Hold" by Brokerages

Key Points

• Analysts give Omnicom a consensus "Hold" rating from eight brokerages (1 sell, 3 hold, 4 buy) with an average 12‑month price target of $95.00.
• Omnicom missed Q earnings with EPS of $2.59 versus $2.94 expected, though revenue rose 27.9% YoY, and sell‑side analysts forecast about $8.25 EPS for the current fiscal year.
• The board approved a $5.0 billion share buyback (up to 38.1% of shares) and declared a quarterly dividend of $0.80 (annualized yield 3.8%), while the reported payout ratio is an unusually high 653%.

Omnicom Group Inc. (NYSE:OMC - Get Free Report) has been assigned a consensus rating of "Hold" from the eight brokerages that are covering the company, Marketbeat Ratings reports. One investment analyst has rated the stock with a sell rating, three have issued a hold rating and four have issued a buy rating on the company. The average 12-month price target among brokers that have issued a report on the stock in the last year is $95.00.

OMC has been the subject of several recent analyst reports. Bank of America reiterated an "underperform" rating and issued a $77.00 price objective (down from $87.00) on shares of Omnicom Group in a research note on Monday, January 5th. Weiss Ratings restated a "hold (c)" rating on shares of Omnicom Group in a research report on Thursday, January 22nd. UBS Group increased their target price on shares of Omnicom Group from $99.00 to $108.00 and gave the company a "buy" rating in a report on Friday, December 5th. Barclays lifted their price target on shares of Omnicom Group from $82.00 to $90.00 and gave the company an "equal weight" rating in a research report on Monday, February 23rd. Finally, Citigroup boosted their price target on Omnicom Group from $103.00 to $115.00 and gave the stock a "buy" rating in a research note on Friday, February 20th.

Omnicom Group Trading Up 0.2%

NYSE:OMC opened at $84.90 on Friday. Omnicom Group has a 1 year low of $66.33 and a 1 year high of $89.27. The company has a debt-to-equity ratio of 0.60, a quick ratio of 0.81 and a current ratio of 0.93. The stock has a fifty day moving average price of $77.83 and a two-hundred day moving average price of $77.05. The stock has a market capitalization of $26.35 billion, a price-to-earnings ratio of 173.27, a PEG ratio of 0.81 and a beta of 0.71.

Omnicom Group (NYSE:OMC - Get Free Report) last issued its earnings results on Wednesday, February 18th. The business services provider reported $2.59 EPS for the quarter, missing the consensus estimate of $2.94 by ($0.35). Omnicom Group had a positive return on equity of 25.65% and a negative net margin of 0.32%.During the same quarter in the previous year, the business earned $2.41 EPS. The business's revenue was up 27.9% on a year-over-year basis. As a group, sell-side analysts anticipate that Omnicom Group will post 8.25 earnings per share for the current fiscal year.

Omnicom Group Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, April 9th. Investors of record on Wednesday, March 11th will be issued a dividend of $0.80 per share. The ex-dividend date of this dividend is Wednesday, March 11th. This represents a $3.20 annualized dividend and a yield of 3.8%. Omnicom Group's payout ratio is currently 653.06%.

Omnicom Group announced that its board has approved a share buyback program on Wednesday, February 18th that permits the company to buyback $5.00 billion in outstanding shares. This buyback authorization permits the business services provider to purchase up to 38.1% of its stock through open market purchases. Stock buyback programs are usually an indication that the company's board believes its shares are undervalued.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the company. Vanguard Group Inc. boosted its position in shares of 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 worth $3,143,930,000 after buying an additional 15,220,444 shares in the last quarter. State Street Corp increased its holdings in 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 valued at $1,933,891,000 after acquiring an additional 6,813,441 shares in the last quarter. First Eagle Investment Management LLC acquired a new position in Omnicom Group during the third quarter worth about $515,145,000. Bank of New York Mellon Corp lifted its holdings 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 valued at $911,172,000 after purchasing an additional 4,631,394 shares in the last quarter. Finally, Wellington Management Group LLP lifted its holdings in shares of 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. Institutional investors and hedge funds own 91.97% of the company's stock.

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.

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