The bank cut its recommendation from a "buy" to a "market perform", following a continued recession in the advertising industry.
Last month, Sir Martin reiterated his belief that any significant recovery in the ad market is as far away as 2004.
WPP revealed at its AGM that it was unlikely to hit its 2002 margin target of 15%, despite a significant reduction in costs by its operating companies. WPP's margins have been hit by the weakness in revenues in the first five months of 2002, and the possible continuation of this trend for the latter part of the year.
In a research note, Lehman Brothers said: "Short-term prospects for advertising recovery appear to be fading, and while the cloud over the advertising subsector remains, the WPP share price may continue to suffer."
WPP's share fell this morning and is currently trading down 3.33% or 18.5p at 536.5p.
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