Mark Read, chief executive of WPP (WPP), has sold over £400,000 of shares as part of his executive share award scheme. Read (pictured) sold 47,862 shares at a price of £9.23 on 7 March equating to a value of £441,742.
WPP released significantly better than expected results (24 February 2022) prompting a series of earnings and price target upgrades from analysts.
Net new business wins during 2021, are estimated to have totalled an industry leading $8.7 billion with mandates including Coca-Cola. This was described by management as the biggest significant re-pitch in its history.
POSITIVE OUTLOOK
WPP is guiding towards revenue growth of 5% with the expectation that mergers and acquisitions could add another 0.5-1%.
Moreover, management is forecasting a headline operating profit margin expansion of 50 basis points, an £800 million share buy-back target and good cash generation.
According to Shore Capital media analyst Roddy Davidson ‘WPP stock is trading on a full year 2022 price/earnings ratio enterprise value/earnings before interest, tax depreciation and amortisation and dividend yield ratios of 11.9x, 6.9x and 3.4%, improving to 9.5x, 6.2x, and 3.9% by 2024.
‘We regard this as an extremely modest valuation for a well managed, market leading, global player offering the prospect of strong medium term growth and cash generation.’
Chief executive of NatWest (NWG) Alison Rose has sold over £330,00 of shares as part of a long term incentive award, under the employee share plan.
Rose sold a total of 178,169 shares on 8 March at a price of £1.89, equating to a value of £336,739.
NatWest's full year results for 2021 demonstrated better than expected earnings.
As a result of the more favourable interest rate environment management upgraded guidance and now expects to deliver a return on tangible equity, comfortably above 10% in 2023.
AMBITIOUS COST SAVING TARGETS
Management is guiding for a total revenue of £11 billion in 2022, representing an increase of 10% year on-year. This, in part reflects the fact the group is a key beneficiary of interest rate rises.
However the group also believes it can drive down costs by 3% year-on-year, both in 2022 and 2023. This appears ambitious in the current inflationary environment.
SHAREHODER DISTRIBUTION
At the results, the group announced a further £750 million share buyback which takes the total 2021 buyback figure to £2.6 billion.
Over the next three years, Numis expects NatWest to distribute over £10 billion of capital, equivalent to 37% of its market value.
