Morgan Stanley: Ad Stocks Less Attractive

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Morgan Stanley has lowered its expectations for ad- industry stock performance in the near term as the top four holding companies prepare to report their second-quarter results.

Morgan Stanley, which previously deemed ad stocks “attractive” compared with the broader market benchmark, now finds them “in line” with other stocks.

Explaining the change in outlook, Morgan Stanley analyst Michael Russell last week cited an “increasingly uncertain economic climate,” which “could reduce new-product introductions and new-win potential even further.”

Separately, Morgan Stanley downgraded its rating of Interpublic Group’s stock—from “overweight” to “equal-weight”—and reaffirmed Omnicom Group’s overweight rating, which means the stock’s total...

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