JPM says ad agencies 'vital' despite Meta's AI, prefers Publicis over WPP

J.P.Morgan says large advertisers still need agencies despite Meta's META.O AI announcements, not expecting its AI-driven tools to replace them

"Larger advertisers will need agencies more than ever in an AI world," the broker says, highlighting Publicis's data capabilities

JPM reiterates "neutral" rating on Britain's WPP WPP.L and "overweight" on French rival Publicis PUBP.PA

The broker expects AI developments to drive unprecedented account consolidation, with Publicis set to benefit the most

It raises Publicis's 2026 growth forecast to 5.2% from 5%, while lowering WPP's to 1% from 3% and cutting its EPS estimate by 7%

JPM cuts WPP's PT by 11% to 650p, citing AI challenges and weak business momentum

It notes that WPP could be vulnerable to external interest in the coming months, which could limit potential downside