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1. Company Snapshot

1.a. Company Description

Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services.It provides a range of services in the areas of advertising, customer relationship management, public relations, and healthcare.The company's services include advertising, branding, content marketing, corporate social responsibility consulting, crisis communications, custom publishing, data analytics, database management, digital/direct marketing, digital transformation, entertainment marketing, experiential marketing, field marketing, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and in-store design services.


Its services also comprise interactive marketing, investor relations, marketing research, media planning and buying, merchandising and point of sale, mobile marketing, multi-cultural marketing, non-profit marketing, organizational communications, package design, product placement, promotional marketing, public affairs, retail marketing, sales support, search engine marketing, shopper marketing, social media marketing, and sports and event marketing services.It operates in the United States, Canada, Puerto Rico, South America, Mexico, Europe, the Middle East, Africa, Australia, Greater China, India, Japan, Korea, New Zealand, Singapore, and other Asian countries.The company was incorporated in 1944 and is based in New York, New York.

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1.b. Last Insights on OMC

Omnicom Group Inc.'s recent performance was driven by strong Q2 2025 earnings, with a 5.1% EPS growth and 4.2% revenue gain. The company's organic growth of 3.0% and non-GAAP adjusted operating income of $439.2 million also contributed to its positive momentum. Additionally, Omnicom's strategic acquisitions, aggressive AI initiatives, and a nearly 4% dividend yield have positioned the company for future growth. A Zacks Rank upgrade to #2 (Buy) reflects growing optimism about the company's earnings prospects. (Source: Zacks)

1.c. Company Highlights

2. Omnicom's Q3 2025 Earnings: A Steady Performance

Omnicom Group Inc. reported a steady third-quarter 2025 performance, with organic revenue growth of 2.6% and non-GAAP adjusted EBITDA margin of 16.1%, up 10 basis points from the previous year. Non-GAAP adjusted net income per share was $2.24, beating estimates of $2.15 and representing a 10.3% increase versus 2024. The company's revenue growth was driven by a 9% increase in media and advertising, which offset declines in creative project work. With a current P/E Ratio of 11.12 and an ROE of 32.44%, the market appears to have a positive outlook on the company's profitability.

Publication Date: Oct -22

📋 Highlights
  • Organic Revenue Growth:: Q3 organic revenue growth was 2.6%, with media/advertising up 9% and creative down due to lower project work.
  • Non-GAAP Financials:: Adjusted EBITDA reached $551.6M (16.1% margin), up 10 bps YoY; adjusted net income per share rose 10.3% to $2.24.
  • Interpublic Acquisition Status:: Antitrust clearance pending EU approval (filed Oct 20), with integration on track to deliver synergies exceeding initial estimates.
  • Free Cash Flow & Repurchases:: $414M in dividends and $312M in share buybacks, with $600M expected for repurchases in FY2025.
  • Geographic Performance:: U.S. grew 4.6%, UK 3.7%, while Continental Europe declined 3.1% in Q3 organic revenue.

Business Segments and Geographies

Revenue growth by discipline showed a mixed picture, with media and advertising growing at 9%, while creative was impacted by lower project work. Geographically, the US saw 4.6% growth, the UK at 3.7%, and Continental Europe declining 3.1%. The company's precision marketing growth was slow in the quarter, primarily due to declines in Europe, but it is addressing these issues to return to growth. As Phil Angelastro noted, the company is using AI and generative AI across the process to aid in areas such as consumer research and customer journey planning.

Acquisition and Integration

Omnicom is close to completing its acquisition of Interpublic, with antitrust clearance secured from all jurisdictions except the European Union. A filing was submitted to the EU on October 20, and approval is expected to finalize in late November. Integration planning is on track, with a focus on delivering synergies and a seamless transition for teams and clients. The company has identified synergies in excess of what was promised at the time of the deal announcement, particularly in areas like media, healthcare, and precision marketing.

Cash Flow and Share Repurchases

The company's free cash flow was impacted by acquisition-related costs and repositioning costs, with primary uses of cash including $414 million for dividends and $312 million for share repurchases. Omnicom continues to expect to spend close to $600 million on share repurchases for the full year. With a Dividend Yield of 3.56% and a Free Cash Flow Yield of 11.59%, the company appears to be committed to returning value to shareholders.

Outlook and Valuation

3. NewsRoom

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17 dividend-stock bargains from a value manager with a stellar track record

Dec -02

Source: marketwatch.com

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Market Today: Crypto Rout, Omnicom Cuts, Nvidia--Synopsys Deal

Dec -01

Source: gurufocus.com

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Omnicom to cut over 4,000 jobs and shutter legacy ad agencies after IPG acquisition

Dec -01

Source: fastcompany.com

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Omnicom's CEO breaks down his plan to beat rivals in AI after the ad giant's blockbuster $9 billion IPG deal

Dec -01

Source: businessinsider.com

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Ad giant Omnicom says its mega-merger with IPG will lead to 4,000 job cuts

Dec -01

Source: businessinsider.com

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Omnicom to cut 4,000 jobs, shut several agencies after IPG takeover, FT reports

Dec -01

Source: reuters.com

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Omnicom Announces Strategy and Executive Leadership Following Acquisition of Interpublic

Dec -01

Source: prnewswire.com

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Omnicom Announces Expiration and Final Results of Exchange Offers

Nov -29

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.90%)

6. Segments

Advertising and Media

Expected Growth: 4.8%

Omnicom Group Inc.'s 4.8% growth in Advertising and Media is driven by increasing demand for digital marketing services, expansion into emerging markets, and strategic acquisitions. Additionally, the company's data-driven approach and investments in technology platforms have enhanced its ability to deliver targeted and measurable campaigns, attracting new clients and driving revenue growth.

Public Relations

Expected Growth: 4.5%

Omnicom Group Inc.'s Public Relations segment growth of 4.5% is driven by increasing demand for reputation management, crisis communications, and digital PR services. Strong client relationships, strategic acquisitions, and expansion into emerging markets also contribute to growth. Additionally, the segment benefits from the rising importance of corporate social responsibility and environmental, social, and governance (ESG) initiatives.

Precision Marketing

Expected Growth: 5.2%

Precision Marketing's 5.2% growth is driven by increasing demand for data-driven marketing solutions, expansion into new markets, and strategic acquisitions. Additionally, the rise of digital advertising, growing importance of customer personalization, and need for measurable ROI are key factors contributing to the segment's growth.

Healthcare

Expected Growth: 5.5%

Omnicom Group Inc.'s 5.5% growth in Healthcare is driven by increasing demand for digital health services, aging population, and rising healthcare expenditure. Additionally, the shift towards personalized medicine, growth of healthcare technology, and expansion of healthcare access in emerging markets contribute to this growth.

Execution and Support

Expected Growth: 4.2%

Omnicom Group Inc.'s 4.2% growth in Execution and Support is driven by increasing demand for digital marketing services, expansion of existing client relationships, and strategic acquisitions. Additionally, the company's diversified portfolio of agencies and strong brand reputation contribute to its growth momentum.

Commerce and Branding

Expected Growth: 5.8%

Omnicom Group Inc.'s Commerce and Branding segment growth of 5.8% is driven by increasing demand for digital transformation, e-commerce enablement, and brand experience services. Key drivers include expansion of existing client relationships, new business wins, and strategic acquisitions. Additionally, the segment benefits from the growing importance of data-driven marketing and personalized customer experiences.

Experiential

Expected Growth: 4.9%

Experiential's 4.9% growth is driven by increasing demand for immersive brand experiences, expansion into new markets, and strategic acquisitions. Additionally, the rise of experiential marketing as a key differentiator for brands, coupled with Omnicom's expertise in creating memorable events, has contributed to the segment's growth.

7. Detailed Products

Advertising

Omnicom Group Inc. offers a wide range of advertising services, including digital, traditional, and experiential advertising, to help clients reach their target audiences effectively.

Brand Consulting

Omnicom's brand consulting services help clients develop and implement brand strategies, positioning, and messaging to drive business growth.

Content Creation

Omnicom's content creation services include video production, photography, and editorial content development to help clients tell compelling brand stories.

Data Analytics

Omnicom's data analytics services help clients measure, analyze, and optimize their marketing efforts using advanced data analytics and insights.

Digital Marketing

Omnicom's digital marketing services include search engine optimization (SEO), pay-per-click (PPC) advertising, and social media marketing to help clients drive online engagement and conversions.

Experiential Marketing

Omnicom's experiential marketing services create immersive brand experiences, events, and activations to engage audiences and drive brand loyalty.

Healthcare Marketing

Omnicom's healthcare marketing services specialize in developing marketing strategies and campaigns for pharmaceutical, biotech, and medical device companies.

Media Planning and Buying

Omnicom's media planning and buying services help clients optimize their media spend and reach their target audiences effectively.

Public Relations

Omnicom's public relations services help clients build and maintain a positive reputation, manage crisis communications, and develop thought leadership strategies.

8. Omnicom Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Omnicom Group Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified portfolio of services and its ability to adapt to changing market trends.

Bargaining Power Of Customers

Omnicom Group Inc.'s customers are largely comprised of large corporations and governments, which have limited bargaining power due to the company's specialized services and expertise.

Bargaining Power Of Suppliers

Omnicom Group Inc. relies on a network of suppliers for its operations, but the company's scale and diversification mitigate the bargaining power of its suppliers.

Threat Of New Entrants

The advertising and marketing services industry has high barriers to entry, and Omnicom Group Inc.'s established brand and reputation make it difficult for new entrants to compete.

Intensity Of Rivalry

The advertising and marketing services industry is highly competitive, with many established players competing for market share, making the intensity of rivalry high for Omnicom Group Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.27%
Debt Cost 4.50%
Equity Weight 35.73%
Equity Cost 8.78%
WACC 6.03%
Leverage 179.84%

11. Quality Control: Omnicom Group Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

73.44$

Current Price

73.44$

Potential

-0.00%

Expected Cash-Flows