Investing.com -- WPP Plc's (LON:WPP) shares rose on Wednesday following its third-quarter trading update, which beat market expectations.
At 9:02 am (0102 GMT), WPP was trading 4.1% higher at £805.60.
WPP reported 0.5% organic growth for the quarter, surpassing the anticipated flat or slightly negative growth.
The company announced net revenue of £2.77 billion for the quarter, closely aligning with Citi Research and consensus estimates.
While organic growth in key markets such as North America remained stable, the UK performance stood out, recording flat growth compared to earlier forecasts of a decline.
WPP’s European operations posted stronger-than-expected results, contributing to the positive market sentiment.
“Our third quarter delivered like-for-like growth in net sales, with a strong performance from GroupM in particular. We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult,” said Mark Read, chief executive at WPP.
Beyond the numbers, WPP secured approximately $1.5 billion in net new business, including high-profile accounts like Amazon (NASDAQ:AMZN) and a renewed partnership with Unilever (LON:ULVR).
These wins have been seen as evidence of the effectiveness of WPP's recent restructuring efforts, including streamlining operations and enhancing GroupM and other specialized agencies.
Citi analysts suggested that this momentum might signal that the company has overcome its earlier challenges.
WPP maintained its full-year guidance, indicating it expects to meet its annual targets despite a challenging macroeconomic environment.
“The sale of FGS (which brings leverage back to target) and the appointment of a new Chair, we think this will reinforce the sense that risks are moderating setting the platform for a rerating,” said analysts at Citi Research in a note.
Citi reaffirming its "Buy" rating on WPP shares, expecting a 35.7% potential share price return.
The company’s ability to retain large accounts while driving margin improvements, even amid sectoral headwinds, has been noted as a key driver of the share uptick.
Analysts from Citi stated that WPP's latest performance and business development efforts put the company in a solid position for accelerated growth into 2025, cementing expectations that the group has moved beyond its most critical operational risks.