JP Morgan said in a note today that WPP had been cut from "overweight" to "neutral". It said: "We believe the recent valuation rally is unjustified given the lack of a corresponding improvement to advertising fundamentals.
"We see no positive catalyst to drive the share price financials outside its recent 400p-500p trading range before 2003."
Shares in the company, owner of the Ogilvy & Mather and J Walter Thompson advertising networks, were down by 5p this morning, valued at 450p. The fall comes as the Interpublic Group of Companies recorded its lowest share price for five years yesterday, on news that it was cutting its earnings forecast. JP Morgan also downgraded Interpublic this week.
However, shareholders in WPP have been well prepared for a flat year. Chairman and CEO Sir Martin Sorrell -- famous for his bath- and saucer-shaped graphs -- has remained cautious about the arrival of an upswing in advertising spend, predicting that it would be at least 2004 before growth was seen in the market.
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