Ipsos: Penalized by less dynamic activity in the United States, Ipsos is falling on the stock market

(BFM Bourse) – The survey research group published lower than expected activity in the first quarter. Ipsos reiterates its 2024 objectives, with a recovery in activity expected in the United States in the second half of the year.

Ipsos’ rating is not in good shape on the Paris Stock Exchange. The specialist in market research and opinion polls lost 7.9% this Friday, penalized after activity in the first quarter marked by a slowdown in the United States.

Over the first three months of 2024, Ipsos’ revenues increased by 4.8% in published data, including 4.5% in organic data to stand at 557.5 million euros. Which “comes out in line” with the expectations of the consensus cited by Oddo BHF at 559 million euros, and of the design office (555 million euros).

“Mixed” organic growth

But for Oddo BHF, organic growth in the first quarter turned out to be mixed, on the one hand because it was below its expectations (5.2%), but also because it benefited from a base favorable comparison. Last year, Ipsos published an organic decline of 2.8% in its revenues.

By geographic region, activity in the EMEA region (Europe, Middle East and Africa) recorded organic growth of 9.7% in the first quarter of 2024, which shows an acceleration compared to the 4.1% recorded in the first quarter of 2024. last year at this time. Ipsos is pleased with “very good results”, particularly in Germany, Switzerland and most continental European markets.

In Asia-Pacific, Ipsos observes a similar trend, with organic growth of 9.2% year-on-year. “India and South-East Asia continue their momentum with double-digit growth rates. If China is growing slightly, the lack of macroeconomic visibility calls for a certain caution,” continues Ipsos.

The downside of the publication is the 3.2% decline in activity in the Americas zone, “an unexpected decline” for Oddo BHF. In the United States, performance is “contrasted” from one service line to another, explains Ipsos.

The group observes a “moderate” recovery of most major Tech clients, and a good orientation of its service lines dedicated to consumers. The “public affairs” activity of the survey research group, however, suffered from “the end of some important and non-recurring contracts” but also from a certain wait-and-see attitude among its clients “linked to the upcoming presidential election”.

The health activity is, for its part, “temporarily in decline at the start of the year”, but should recover in the coming months, suggests the specialist in survey studies.

2024 objectives confirmed

The leaders reiterate their financial objectives for 2024 which they communicated last February. The company confirmed that it expects organic growth of more than 4% and an operating margin of around 13%. Maintaining Ipsos’ outlook is based in particular on an expected rebound in activity in the United States in the second half.

“This publication does not lead to a change in our forecast results for the next financial years. For 2024, the impact of slightly more limited organic growth (+4.1% consensus +4.5%) is offset by less negative exchange rate effects”, indicates Oddo who renews his conviction of “outperformance” and his price target of 85 euros, on the value.

The research firm, however, removes Ipsos from its list of European Midcap Convictions “after a good stock market performance since its entry in mid-2023”.

Sabrina Sadgui – ©2024 BFM Bourse

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