WPP shares drop as influential broker downgrades rating

 
Josh Mines
Rebekah Brooks, CEO of News UK, attends The Times CEO summit in London
Shares in the FTSE 100 powerhouse were down three per cent today (Source: Getty)

WPP shares slipped on Tuesday as a City broker downgraded its rating on the back of uncertainty over who was being lined up to replace Martin Sorrell as chief executive.

Currently, Mark Read and Andrew Scott are working as joint operating officers of the advertising giant following Sorrell's exit.

Since Sorrell dramatically resigned in April, WPP has seen business leave the company, as major client HSBC last month said it would be ending a 13-year media relationship with the firm.

Read more: WPP chairman Quarta gets backing from influential City advisory group

WPP shares closed down three per cent yesterday, at 1,213p, after Berenberg downgraded its rating.

Alastair Reid, at Berenberg, said: "We expect WPP’s situation to get worse before it gets better, and hence we downgrade to Sell. WPP’s recent performance versus peers shows that all is not well from an internal operational perspective, we think that this will prove more difficult and costly to fix than consensus expects."

Berenberg also cut WPP's target price to 1,075p from 1,275p.

Overall, the FTSE 100 was slightly down 0.7 per cent, finishing the day at 7686.8.

Despite uncertainty over the company's succession plans, chair Roberto Quarta was last week handed a life line as an influential adviser recommended that shareholders reinstate him.

Read more: Sir Martin Sorrell comeback: Former WPP boss reveals plans for new business

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