Deutsche Bank has cut earnings estimates for WPP by 2% and Publicis by 6%, after examining both groups' first-quarter results for the year. It said that weakness in performance in the first quarter meant that earnings downgrades were more likely than previously thought.
"In recovery phase, we believe the agencies may not show a clear improving trend in their organic revenue line until the third or fourth quarter of the year," a research note said.
Publicis saw revenue for the quarter rise by 4.6% to €576m (£359m), a result described by the group's chairman Maurice Levy as "extremely encouraging". WPP said that its first-quarter revenues were down by 2%, and CEO Sir Martin Sorrell has said that recovery may be as far as two years away.
However, shares in both groups were on the up this morning. Publicis, listed in Paris, was up by 0.72% to €32.25, while WPP, listed in London, rose by 0.62%, or 4.5p, to 726.5p, recovering some ground after yesterday's 2.4% slide, thought to be in reaction to the news of Unilever's £320m ad deal with ITV.
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