Lehman Brothers cut its target share price for the company to 100p from 120p. In a research note, the investment bank said it had cut its pre-tax profits forecast to £46m.
In the research note, Lehman Brothers said: "Although Aegis indicates the trend in client adspend is stabilising, it expects the advertising market to show flat or negative growth in 2002 with no recovery until the second half," .
It is a further blow for the company, owner of media-buying giant Carat, which has already seen several banks cut forecasts for the coming year.
As well as being hard hit by the downturn in the advertising market, this week it was revealed that Aegis is set to lose some £10m after the collapse of Argentina's economy.
There has been speculation that the company will become a target for takeover, but chief executive Doug Flynn has said in the past that Aegis will remain independent.
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