Stock of the Week: Omnicom

Don’t forget about the advertising sector outside of FAANG stocks

Andrew Willis 1 March, 2021 | 4:28AM
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Andrew Willis: When talking about online advertising trends, chances are you’ve heard about Facebook and Apple. But what about all the other platforms and digital media providers out there?

Enter the world’s second-largest advertiser, Omnicom (OMC). Omnicom is an established player in the traditional and physical media space, and that complements and helps drive organic growth for the company in the digital space.

Unlike many of the high-priced communications and technology-related stocks we saw soar last year, Omnicom remains undervalued and poised to recover alongside a broad economic recovery.

Senior Equity Analyst, Ali Mogharabi, says that the company is a top choice for businesses in growing digital ad markets and faster-growing emerging markets, and he expects a return to growth mode in all markets this year.

This old guard has the experience, knowledge and a clear understanding of different cultures and regulations to stand out. With an array of established, creative agencies internationally and significant investments in Big Data, they create a ‘total package’ for clients looking to advertise.

Our bullish case sees this stock’s fair value around 113 U.S. dollars, which would leave about 63% upside from here. The potential scenario also reminds us how innovative industries are not always exclusive to hot stocks today – as the economic recovery, for this stock, is not yet priced in.

For Morningstar, I’m Andrew Willis.


Editor's Note: All images are courtesy of and AP Images. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Omnicom Group Inc90.47 USD0.80Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar Canada. He previously produced content for Fidelity Investments and finance industry events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @Andrew_M_Willis.

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