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Media giant WPP (LSE: WPP) is in the unenviable position of being the biggest faller in the FTSE 100 so far in 2025. It’s been picking up a bit in the past couple of weeks. But we’re still looking at a 52% decline since fireworks heralded in New Year.
With a market-cap of £4.27bn at the time of writing, WPP’s hanging on to a position in the FTSE 100. But not by a lot. It wouldn’t have to fall much further to lose its place at the London Stock Exchange‘s top table. That would be a sad comedown for the company that ruled its sector in the days of founder Sir Martin Sorrell.
A gloomy year
The big question is — should investors consider buying WPP shares now? I think yes. But first I want to see what’s been giving the share price such a kicking in 2025.
Looking at the year-to-date share price chart, there are two sharp drops. And — perhaps no surprise — they coincide with company updates.
The most recent was a first-half trading update on 9 July, with the stock falling 19% on the day. It marked a 16-year low… and it’s since dipped even lower. The update made for painful reading: “Against a challenging economic backdrop, we have seen a deterioration in performance as Q2 has progressed“.
The earlier one-day fall — of 10% — followed 2024 full-year results. I won’t dive into those here, but they weren’t great.
Reasons to be cheerful
Despite all that, I see reasons to be cautiously upbeat. The 2025 interim report released on 7 August showed figures in line with July’s expectations. But I took heart from a couple of things CEO Mark Read announced.
Despite a tough business environment, he said: “We have, however, made significant progress on the repositioning of WPP Media, simplifying its organisational model to increase effectiveness and reduce costs.”
He also told us “the acquisition of InfoSum, the launch of Open Intelligence and the continued adoption of WPP Open all strengthen our data and technology capabilities.”
If anyone in this business has the clout to bring artificial intelligence (AI) to bear on the media market, I reckon WPP still has to be a frontrunner.
It’s the dividend
The company announced an interim dividend of 7.5p per share — just half of where it was a year ago. The boss said it comes “ahead of a review of the strategy and future capital allocation policy which will be led by Cindy Rose, who succeeds me as CEO on 1 September.”
The likelihood of a reduced dividend seems inescapable. But that headline 6.3% yield is based on analyst forecasts for the full year — after their predicted cut.
A new CEO can provide the opportunity for a new beginning. So I’m keenly looking forward to hearing Cindy Rose’s plans. I think the second half of the year could mark a turning point for WPP.
With all these uncertaities, there’s real risk of WPP’s turnaround not materialising. But, especially with a forward price-to-earnings (P/E) ratio of only 9.5, my contrarian eye’s firmly fixed on WPP as a candidate for my next buy.
