- Noreen O'Leary

NEW YORK Citigroup Global Markets downgraded WPP Group to "Hold" from "Buy" even as the investment bank described the company as the "best positioned agency" in its peer group.
 
Citi said it made the shift based on valuation and timing. Even though Citi does not think WPP shares are "especially expensive," it believes the current valuation is not "sufficiently compelling to support a 'Buy' rating."

Furthermore, Citi cited the seasonality of sector performance for companies like WPP, noting that agency groups typically see the bulk of their relative share price performance between October and the release of full-year results in Q1.
 
According to Citi: "This is for a good reason...Not only are revenues and profits concentrated in Q4, and especially November/December, but there is an inherent asymmetry in how underdelivery/overdelivery versus budgets is received during the year."