Omnicom Group Inc: Show Me The Money

Will stock investors see better earnings next quarter?


OMC (Omnicom Group Inc., $70.24) is one of the world’s largest advertising, marketing and corporate communication services you can find today. Omnicom also has a healthcare marketing group knowns as Omnicom Health Group.

OMC didn’t beat their earnings last quarter and investors aren’t happy. The worst part is the company is still expecting a decrease in revenue in the next quarter. Investors are also concerned about the money spent with their recent acquisition of Elsevier’s Pharmacy Communication Group located overseas in Japan. This will make another year for less revenue.

(Screenshot from StockTwits Chart IQ)

Last year OMC’s net income decreased by 5.2%, or $60.2 million, SGA costs rose to $6.1 million, and the company confessed on their annual report that revenue decreased by $647.3 million (4.2%). There are a lot of expenses, but not much growth in earnings.

However, does this make Omnicom a bad company? Though investors are concerned about their expensive remodels and acquisitions, stock analysts are suggesting OMC as a Hold investment. A comment shared in their annual report to their investors,

We are driven by out clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of advertising, marketing and corporate communication services through various client-centric networks that are organized to meet objectives.

OMC is often compared with NXST (Nexstar Media Group), IPG (Interpublic Group), LAMR (Lamar Advertising Company), CCO (Clear Channel Outdoor) and MCMI (Nationa CineMedia). Yet, despite their poor earnings report, loyal shareholders are holding their investments.

Read: Nexstar Media Groups Takes Action (NXST)

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Target’s Competitive Advantage

TGT (Target Corporation, $77.52) has redesigned their store layouts in specific states across America and is keeping their place in the race against AMZN (Amazon, $1,695.25). TGT has also maintained steady dividends since 2013- currently 3.372 Div/Yield. Today they end at $77.52, reaching their 52-week high of $78.84. While some investors are planning to buy back in on bearish accounts, TGT has a couple upcoming features this summer you may be interested in.
This summer, TGT has teamed up with The Museum of Ice Cream of NY for a more “sweet” approach to their new kid’s clothing line, Art Class. “We want guests to experience a true sense of joy when they’re shopping at Target, and one way we do this is through partnerships we think they’ll love,” said Mark Tritton, executive vice president, and chief merchandising officer.
TGT has also revised their home essentials brand now called Made By Design, for a more minimalistic modern look. “Made By Design is the ultimate expression of our DNA—a commitment to the democratization of impeccable design,” says Tritton. Made By Design was made in mind for those establishing their new home, looking to add simplistic home items at an affordable price.
Some investors compare TGT as a lesser buy to their competitor COST (Costco, $196.75) as a more profitable brand that has a better competitive advantage. TGT has a strong retail lifestyle brand that keeps their customers happy and stays ahead with its brilliant marketing and cutting-edge clothing brands their customer are constantly looking for.