Publicis Reports Solid Q1, Second-Half Uncertainties Increase; Maintaining Fair Value Estimate

Publicis posted strong first-quarter net revenue as the recovery in demand that started last year has continued into 2022. While double-digit organic growth was impressive, management maintained its full-year organic growth guidance given the current economic and geopolitical uncertainties. Morningstar’s economic research team continues to expect stable economic growth in the U.S., Publicis’ largest market, during the next few years, which we believe will offset weakness elsewhere. We are not making significant changes to our model and are maintaining our EUR 69 fair value estimate for this narrow-moat firm.