Broker snap: UBS upgrades WPP on global outlook

Advertising giant WPP was performing well on Thursday, helped by an upgrade from UBS from neutral to buy.The broker also hiked its target price from 675p to 840p, suggesting a significant upside to the current price of 716.5p (at yesterday's close)."We believe WPP offers favourable risk-reward," said analysts at the Swiss bank. "In our opinion, a near-term slowdown in Europe is already in consensus expectations, medium-term growth is secured through global exposure, and valuation and cash returns are supportive, leaving the stock with greater potential upside in a stronger market than professional publishers, but with less risk than broadcasters."WPP's organic growth in the 12 months to the end of 2012 will be driven by around 2% global economic growth, as opposed to the 1% global recession in 2009 which drove an 8% organic decline, notes the broker.With the stock trading at 9.5 times 2012 earnings, and peers trading at a multiple of 11.5, UBS argues that WPP is "cheap even on our conservative forecasts".BC