Omnicom’s share price has set a new record after breaking the $100 barrier.
The stock hit a peak of $103.90 on 19 September as the US ad agency group has benefitted from growing optimism about the economic outlook in its home market.
Omnicom’s share price has risen about 18% since the start of 2024 and its valuation hit $20bn on 18, 19 and 20 September and again on 26 September.
The stock previously hit an intra-day high of $100 during one day in April 2023 but September 2024 is the first sustained period where it has been trading above that level.
Omnicom’s stock market capitalisation remains below its all-time high of $20.9bn set in 2016 because of share buybacks, which have reduced the total number of shares in issue.
An undisclosed number of Omnicom staff, as well as former senior executives, own shares and will benefit from the rising stock price.
“Share-based compensation expense in 2023, 2022 and 2021 was $84.8m, $81.7m and $84.7m, respectively,” the company said in its annual report.
Omnicom generates about half of its revenues from the US. Global revenues grew 4% in Q1 and 5.2% in Q2 and the agency group won Amazon’s media-buying account in the Americas at the start of September.
The US-listed group has also looked to improve efficiencies by announcing at the end of August that it was creating Omnicom Advertising Group (OAG), a global umbrella unit that brings together all of its creative agencies, BBDO, DDB and TBWA, under one leadership for the first time.
When Omnicom created OAG, investment bank BNP Paribas Exane said it was a “small positive” for the stock price in the near term.
“However, we think this is a crucial move for the long term that will make Omnicom’s creative business more effective,” the bank said.
It is “not efficient any more” for creative networks to retain a “high level of independence” inside a holding company as data and technology become more important, according to BNP Paribas Exane.
Omnicom is the second global agency group to set a share price record this year.
France’s Publicis Groupe broke the €100 level in March, propelling its valuation above €25bn for the first time.
Publicis is currently the world’s most valuable agency group with a €25.7bn ($28.7bn) stock market capitalisation, ahead of Omnicom, which is the second largest on $20.2bn.
IPG and WPP are next largest, with valuations of $11.8bn and about £8.4bn ($11.2bn).
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