Publicis Earnings: Strong Revenue Growth Continues; Maintaining Our Fair Value Estimate

Narrow-moat-rated Publicis delivered another solid quarter, with revenue growth coming in above expectations. Management had guided to organic revenue growth of 4%-5% for the year; first-quarter results showed 5.3% growth. Despite these solid results, management maintained its full-year outlook for organic revenue growth as well as an 18% operating margin. We were already expecting results to trend toward the higher end of the guidance range, and we see the first quarter as supporting our current forecast for 4.8% annual organic growth. If Publicis can exceed 5% organic growth again next quarter, we would not be surprised to see it raise guidance. With the results meeting our expectations, we are keeping our EUR 100 fair value estimate in place. We acknowledge there could be some upside to our revenue estimate if the company posts another strong quarter. We continue to view Publicis as a winner compared with peers, with its integrated data and media offerings taking share.