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Interpublic (IPG) Aided by Technology & Digital Capabilities

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The Interpublic Group of Companies, Inc. (IPG - Free Report) is currently benefiting from diverse workforce, technology and digital capabilities.

Recently, the company reported second-quarter 2021 adjusted earnings (excluding 4 cents from non-recurring items) per share of 70 cents. The figure beat the Zacks Consensus Estimate by 55.6%. Moreover, the bottom line surged more than 100% on a year-over-year basis. Net revenues of $2.3 billion beat the consensus estimate by 8.7% and increased 12% on a year-over-year basis.

The stock has surged 106% in the past year compared with a 47.9% rise of the industry it belongs to.

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How is Interpublic Faring?

Interpublic’s increasingly diverse workforce gives the company a key competitive edge. It continues to attract, acquire and develop strategic, creative as well as digital talent from diverse backgrounds to increase organic growth and strengthen its foothold in international markets.

 To develop and maintain direct consumer relationships is one of Interpublic’s key growth strategies. For this, the company provides tools and assists clients in connecting with individual customers at scale. Further, it brings together data and technology talent along with media experts to develop software that enhances client’s marketing.

The company continues to invest in technology and internationalize its digital specialist agencies to keep pace with the rapidly-evolving media landscape. It has been enhancing its digital capabilities like search, social, user experience, content creation, analytics and mobile across its portfolio to maintain growth in the dynamic sector.

Meanwhile, cash and cash equivalent balance of $2.34 billion at the end of second-quarter 2021 was well below the long-term debt level of $2.91 billion, underscoring that the company doesn’t have enough cash to meet this debt burden. However, the cash level can meet the short-term debt of $560 million.

Zacks Rank and Other Stocks to Consider

Interpublic currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors interested in the broader Zacks Business Services sector can also consider other top-ranked stocks like ManpowerGroup Inc. (MAN), Equifax (EFX) and Genpact Limited (G), each carrying a Zacks Rank #2 (Buy).

The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Equifax and Genpact is pegged at 24.2%, 15.2% and 14.7%, respectively.
 


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