WPP stock plunges as agency group issues second revenue downgrade in three months

WPP's annual revenues are now forecast to drop between 5.5% and 6%, as per reports. This marks the second downgrade in just three months for the troubled agency group. The latest revision follows a shock profit warning in July, when WPP predicted a decline of between 3% and 5%, a significant slump from an earlier forecast in February of between zero and 2% growth.

The gloomy outlook sent WPP's stock into a tailspin, with the share price slumping 16% to its lowest level in 27 years after missing forecasts in its latest quarterly results. The stock closed the day at $4.02 (302.5 pence), valuing the once-dominant British group at approximately $4.29 billion (£3.26 billion).

The catastrophic year has seen the stock fall about 63% from its starting point of $1.10 (830 pence) in January 2025. This dramatic erosion of value follows a string of high-profile account losses, including Coca-Cola's media in North America and Mars' global media business.

New CEO Calls Performance "Unacceptable"

Cindy Rose, who took the helm as chief executive on September 1, admitted that the performance of the UK agency group—once the biggest in the world—was "unacceptable."

The short-term pain is set to continue. Chief Financial Officer Joanne Wilson told investors that the fourth quarter could be down 7.5% as the full effect of client departures hits. Analysts at JP Morgan Cazenove estimate that the decline could extend into 2026, forecasting revenues could fall by as much as 3.5% more.

The current share slump is now worse than during the pandemic, a period when the stock briefly dipped below $6.58 (£5) in 2020. While revenues managed to rebound in 2021 and 2022, growth stalled in 2023 and has now reversed course in 2024. WPP's valuation peaked in 2017 at about $25 (£19), with a market cap of $31.6 billion (£24 billion). The stock last traded below $2.95 (£3) a share in 1998.

Relegation Risk and Short Sellers

WPP's declining market value means the company is now at a significant risk of being relegated from the FTSE-100, the UK's leading index of the 100 largest companies.

In a clear sign of investor expectations, hedge funds and other investment groups have been increasing their bets against WPP, actively shorting the stock in anticipation of further declines. According to disclosures to the UK Financial Conduct Authority, six investment groups had built up short positions worth more than 6% of the agency group’s valuation ahead of the Q3 results.