The credit agency Moody's has switched WPP's debt rating from stable to negative owing to this year's performance and future uncertainty.
Moody's joins ratings agency Standard & Poor's and the investment banks Credit Suisse First Boston, Merrill Lynch and Morgan Stanley in cutting outlook and targets for the advertising giant.
Moody's specifically mentioned WPP's performance in North America, where it recorded a 6.3% slump in revenues for the first half of 2002, and WPP's share buy-back programme as reasons for the move.
In a research note, Moody's said it expects WPP to continue to manage its cost base, including its substantial establishment costs, aggressively. It added that it believes that WPP can maintain its track record of above-market new-business wins.
However, shares in WPP were trading up by 2.2%, or 11p, when the market opened this morning, at 479p.
WPP CEO Sir Martin Sorrell warned earlier in the week: "It seems unlikely that significantly improved performance will occur in 2002 and that any recovery will have to await 2003 or, perhaps, even more likely 2004, when the US presidential election and the Athens Olympics will begin to have a positive effect, at least on media markets."
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