WPP PLC (LSE: WPP)

WPP PLC (LSE: WPP) is an FTSE 100 index listed creative transformation company. It is engaged in a diverse range of services such as investment management, advertising, media, public relations, and public affairs.

As per our previous recommendation on WPP as on 17 October 2022, a ‘Buy’ rating on the stock at GBX 738.00 was given, and noted below are the details of support/ resistance provided in our previous report:

Investment Rationale – SELL at GBX 876.00

• Profit Booking: WPP’s stock price has breached the previously recommended R2 level, and it is presenting a profit booking opportunity.
• Emerging Risks: WPP's performance is susceptible to inflationary pressure, economic recession, supply chain snags, rising energy prices, among others.
• Decline in Headline Operating Profit Margin: The Company’s Headline Operating Profit Margin declined from 12.1% in H1 FY21 to 11.6% during H1 FY22.
• Technical Indicator: The 14-days RSI of ~77.53 illustrates that the stock approached an overbought territory.

WPP’s Daily Chart

Valuation Methodology: Price/Earnings Approach

Considering the resistance 2 level achievement, overbought technical stance and risks associated, it is prudent to exit and book profit at the current levels. Hence, a 'Sell' rating has been given on the stock at the current price of GBX 876.00 (as of 14 November 2022 at 08:19 AM GMT). 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 14 November 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.

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