Berenberg upgrades WPP to 'hold' but anticipates headwinds to growth

(ShareCast News) - Berenberg moved its rating for advertising giant WPP to 'hold' from 'sell' and raised its price target to 1360p from 1325p.The bank said WPP's first half results were operationally in line with its forecasts and while agency fee pressure continued, that was nothing new.Foreign exchange was a drag, and was getting worse, Berenberg said, given substantial depreciation of key emerging markets currencies.The bank said in the current environment agencies were increasingly in need of acquisitions."In our view, WPP in particular will need to increase spend on M&A in the future, given its relatively underweight digital positioning," Berenberg said.Berenberg said it preferred French ad conglomerate Publicis because expectations for it were lower and meaningful headwinds were easing.However, on current levels WPP was no longer a sell, the bank said, and therefore upgraded it to 'hold'.