WPP Share News (WPP)

Nomura has reduced its target price for advertising and media giant WPP from 1,030p to 980p after cutting its forecasts for organic growth on the back of a slowing macro-economic environment.In a research report published late on Thursday, the broker said it has slashed its organic growth estimate for 2013 from 2.5% to just 1%, "demonstrating further that momentum has changed for the company and the sub-sector".The broker said: "This could appear harsh, but the range of outcomes has seriously widened given zero growth in September 2012."Good arguments could be made for 3% growth in 2013 (easy comps, US fiscal cliff avoided, Europe stabilised and a soft landing in China), or for -4/5% (US fiscal cliff becomes real, the euro heads towards a break-up and China has a hard landing)."Nomura has reduced its 2012 and 2013 earnings per share (EPS) forecasts by 1.7% and 4.3%, respectively. While revenue estimates are also reduced, the broker still forecasts a 3.5% increase in revenue in 2014 driven by "hoped-for economic improvement, the World Cup in Brazil and US elections."Despite the reduction in target price, Nomura says that while momentum for the whole agency sub-sector is poor, the valuation - shares trade at 10.6 times earnings - is relatively low. A 'buy' rating is retained.BC