WPP Remains Under Pressure as UBS Keeps Sell Rating Despite Better-Than-Expected Q1 Update
WPP Remains Under Pressure as UBS Keeps Sell Rating Despite Better-Than-Expected Q1 Update
WPP PLC has delivered a first-quarter update that was slightly better than market expectations, but Swiss bank UBS remains cautious and continues to rate the advertising group as a Sell.
In the first quarter of 2026, WPP reported revenue of £3.03 billion, down 6.6% on a reported basis. Revenue less pass-through costs fell to £2.26 billion, representing a 6.7% like-for-like decline. This was better than consensus expectations of around a 7.8% fall, but still showed that the business remains under pressure.
UBS Keeps Its Sell View on WPP
UBS said the update was “better than feared,” but not strong enough to change its negative investment stance. The bank remains concerned that WPP’s recovery will take time, especially as the group continues to face weak client spending, account losses, regional uncertainty, and pressure from artificial intelligence disruption across the advertising sector.
The Swiss bank’s cautious view reflects a simple point: while WPP may be stabilising, it has not yet proved that it can return to sustainable organic growth. Investors welcomed the smaller-than-expected decline, but UBS appears to believe the market may be underestimating the scale of the turnaround challenge.
Q1 Results Show Improvement, But Revenue Is Still Falling
WPP’s first-quarter performance was in line with management guidance. The company said trading was ahead of the fourth quarter of 2025, suggesting that conditions may be improving gradually. However, the headline numbers still showed a business in decline.
The group’s largest unit, Global Integrated Agencies, recorded a 7.4% fall in like-for-like revenue less pass-through costs. Within that division, WPP Media declined by 8.5%, while other integrated agencies fell by 6.4%. Public relations declined by 2.6%, and specialist agencies were down 2.3%.
Regional Weakness Remains a Major Concern
WPP’s results showed pressure across several important markets. North America declined by 7.8%, the UK fell by 6.6%, and Western Continental Europe dropped by 4.7%. The Rest of World region declined by 6.9%, with China down 12.2% and the Middle East down 12.6%.
The Middle East was a particular drag because regional instability has made some clients more cautious with advertising budgets. Reuters reported that WPP pointed to uncertainty linked to Middle East events as one factor affecting demand.
WPP Reiterates Full-Year Guidance
Despite the difficult start to the year, WPP maintained its full-year outlook. The company still expects like-for-like revenue less pass-through costs to decline by a mid-to-high single-digit percentage in the first half of 2026, followed by an improving trend in the second half.
WPP also reiterated its forecast for a headline operating profit margin of 12% to 13%. This guidance suggests management believes cost control, restructuring, and stronger new business momentum can help protect profitability even while revenue remains weak.
Cindy Rose Pushes Ahead With Elevate28 Turnaround Plan
Chief executive Cindy Rose is leading WPP through a major restructuring plan called Elevate28. The strategy is designed to simplify the company, improve integration, strengthen artificial intelligence capabilities, and return the group to growth by 2027.
As part of the plan, WPP is combining major creative agencies such as Ogilvy, VML, and AKQA under a broader WPP Creative structure. The company is also aiming to generate around £500 million in annual savings by 2028.
New Business Momentum Offers Some Hope
One positive point in the update was WPP’s new business performance. The company said its simpler, more integrated structure is resonating with clients. Recent client wins and expanded relationships, including work with major global brands, may help support the recovery over time.
However, UBS appears to want more evidence before becoming positive on the stock. The key issue is whether WPP can turn new business wins into stronger revenue growth while also reducing the impact of past client losses.
Why Investors Remain Divided
For optimistic investors, WPP’s first-quarter update may suggest that the worst is beginning to pass. The decline was smaller than expected, guidance was maintained, and the company is making progress on its restructuring plan.
For cautious analysts such as UBS, the risks are still clear. Revenue is falling, major regions remain weak, AI is reshaping the advertising industry, and WPP’s recovery plan will take time to deliver visible results.
Outlook for WPP
WPP’s next challenge is to show that stabilisation can become real growth. The second half of 2026 will be important because management expects trading trends to improve. If that improvement fails to appear, pressure on the share price and analyst confidence could continue.
For now, WPP has delivered a result that was better than feared, but not strong enough to remove doubts. UBS’s continued Sell rating shows that some analysts remain unconvinced that the advertising giant’s turnaround story is ready to be trusted.
Conclusion
WPP’s first-quarter update gave the market a small dose of encouragement, but the company remains in a difficult position. Revenue is still declining, several key regions are weak, and the advertising industry is changing quickly. While Cindy Rose’s Elevate28 plan gives WPP a clearer path forward, UBS believes the risks remain high. Until WPP can prove consistent organic growth, the debate around its recovery is likely to continue.
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