WPP.L - WPP plc

LSE - LSE Delayed price. Currency in GBp
-18.60 (-2.95%)
At close: 4:35PM BST
Stock chart is not supported by your current browser
Previous close630.20
Bid608.60 x 0
Ask609.40 x 0
Day's range605.20 - 637.00
52-week range450.00 - 1,085.50
Avg. volume6,076,633
Market cap7.494B
Beta (5Y monthly)1.15
PE ratio (TTM)12.36
EPS (TTM)49.50
Earnings date07 Aug 2020 - 11 Aug 2020
Forward dividend & yieldN/A (N/A)
Ex-dividend date11 Jun 2020
1y target est1,078.52
  • WPP and SuperAwesome Announce Global Partnership to Ensure Privacy and Safety for Kids and Families Within Online Advertising
    Business Wire

    WPP and SuperAwesome Announce Global Partnership to Ensure Privacy and Safety for Kids and Families Within Online Advertising

    WPP (NYSE:WPP) and SuperAwesome, the leading kidtech platform, today announced a partnership to advance the standards of privacy for children in the global digital ecosystem.

  • Coronavirus: Advertising tycoon Martin Sorrell predicts 'permanent' digital shift
    Yahoo Finance UK

    Coronavirus: Advertising tycoon Martin Sorrell predicts 'permanent' digital shift

    Advertising tycoon Martin Sorrell predicted that the coronavirus pandemic will prompt firms to accelerate their digital transformation.

  • Brokers upbeat on Wpp despite economic uncertainty

    Brokers upbeat on Wpp despite economic uncertainty

    The Wpp (LON:WPP) share price has risen by 4.51% over the past month and it’s currently trading at 565. For investors considering whether to buy, hold or sell...

  • Keep Your Virus News Away From My Ad: Brands Build ‘Blacklists’

    Keep Your Virus News Away From My Ad: Brands Build ‘Blacklists’

    (Bloomberg) -- Readers are flocking to news sites for the latest on Covid-19. Advertisers are running the other way.As news editors do everything to harness public interest in the worst public health crisis in more than a generation, their main source of income is in freefall, with brands pulling ads from news sites, papers and magazines.To some extent that’s normal: With businesses hoarding cash just to stay afloat, marketing campaigns are a low priority. But a bad situation is being made a whole lot worse by advertising “blacklists” — sets of keywords that stop ads appearing next to certain categories of news that are considered a turn-off by brand managers. Because so much coverage now touches on coronavirus, one of the biggest stories of the century is turning into an advertising no-go zone.The Interactive Advertising Bureau (IAB), a trade group, surveyed U.S. web publishers in early April and found that news organizations were twice as likely to have ads blocked because of keyword blacklisting.News executives, and even some advertising experts, say the lists can be arbitrary, unfair and often nonsensical: there’s little evidence that readers are less responsive to an ad for shampoo or a car hire service just because they’re sitting alongside a “bad news” story. What’s more, they’re killing news.“We’re in danger of losing some of the most trusted publishers we have in the U.K. in the coming months,” said Tracey de Groose, executive chairman of British news industry marketing body Newsworks. “The unintended consequence of this is the commercial censorship of journalism.”Newsworks calculated that Covid-19 blacklists are set to cost British news brands more than 50 million pounds ($61.7 million) in the next three months — a potential lifeline for newsrooms already slashing costs to survive. It said its members already lost 170 million pounds last year from an ever-growing list of common news words that brands avoid, such as “terrorism” and even “Brexit.” Integral Ad Science Inc., one of a complex array of tech firms that influence where ads appear online, said marketers have begun to address the problem — specific coronavirus-related keyword blocking has fallen by 80% since mid-March in the U.S. and 77% in the U.K., according to IAS Chief Executive Officer Lisa Utzschneider. Prior to that, marketers requested blanket bans on ads appearing next to content with words like “coronavirus” or “pandemic.”In the U.K., news organizations have spent more than a month lobbying ad executives to stop them blocking ads near virus coverage, and even drafted in the government to add its weight to the campaign, to little avail. There’s yet to be any rebound in income for publishers, said de Groose at Newsworks. That’s galling for news sites that have seen readership more than double in some content categories in Europe, according to audience data firm Comscore.In a follow-up IAB survey last week, 18% of news publishers reported that blacklist restrictions had loosened in their second quarter planning. More than half said nothing had changed.Companies that provide “brand safety” lists often use outdated terms and obscure how their keyword targeting works, said Nandini Jammi, a marketing industry advocate. “These are not made clear to advertisers,” she said. “Everyone is doing it. No one is thinking about it.” At the other end of the chain, news publishers struggle to find out which brands are blocking what, making it harder to hold the brands to account. The companies that administer the ad blocking profit from each block, so have little incentive to help. WPP agency GroupM said it’s trying to get brand marketing teams to making their blacklists more intelligent so more ads reach trusted news sources.Rather than blocking “Covid-19,” they block a combination of words such as “Covid-19-Miracle Cure” or “Covid-19-Refrigerated Truck” so that ads don’t appear alongside irresponsible or particularly unpleasant news stories, said John Montgomery, the head of GroupM’s global brand safety practice.“The technology is not the enemy,” he said. “It’s the way we use it.”  Opaque MarketUnpicking the chain of arrangements that are pulling advertising away from news is complex because publishers are the last link in a vast online ecosystem. Digital ads are created by agencies at global companies such as WPP Plc and transmitted via technology platforms including Alphabet Inc.’s Google and intermediaries like IAS and DoubleVerify. An ad flows through a warren of automated marketplaces and is sold a split-second after you click a link to the page where you see it. A myriad of suppliers trade and verify the content, while others gather data to target it better. It’s turned what used to be a simple agreement between a paper’s ad department and a brand marketing representative into an opaque process that’s dissipated responsibility and accountability.Google rejects any blame for the boycott of Covid-related news, saying there are no technical or policy reasons to stop publishers monetizing coronavirus-related content on its platforms.“We are in constant discussions with our publishing partners, advertisers and agencies on how we can continue to support a sustainable future for news,” said a Google spokesperson. Ad dollars have been draining from the news business for a decade for reasons that reach beyond the pandemic, said Montgomery at GroupM. As the big social media platforms developed sophisticated filters to keep brands safe from harmful or toxic content, they’ve captured more of the ad dollars that once went to news. The result is that “media planners have been trained not to need news any more,” he said.News organizations such as New York Times Co. and Nikkei Inc.’s Financial Times have cut dependence on ads by moving to reader subscriptions or memberships. Models are also emerging in which tech giants share more revenue, like Apple Inc.’s subscription News+ service or Facebook Inc’s agreement to pay trusted publishers. Ad-funded news organizations pushed to the brink by the virus-induced ad slump are trying to innovate their way out of danger. Some publishers are pitching ad slots next to “good news” stories from the pandemic, relying on technology that can scan language and find the happier articles.One of Britain’s biggest newspaper companies, Reach Plc, has teamed up with International Business Machines Corp. and AT&T Inc. to boost its language processing software and direct ads to these stories. “Coronavirus articles that have a positive sentiment are good for your brand,” said Damon Reeve, chief executive officer of the Ozone Project, an ad platform set up in 2018 by several U.K. news publishers including the Telegraph and the Guardian.For all those efforts, ad blacklists will be hard to banish as long as there are news themes that brands want to avoid.“Yes, ‘coronavirus’ has been the number-one blocked keyword,” said IAS’s Utzschneider. “But before that, it was ‘Trump’.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Why WPP could appeal to contrarian value investors

    Why WPP could appeal to contrarian value investors

    Contrarian value investors are always on the look-out for shares that the market has overlooked. In times of economic uncertainty - when stocks prices become e8230;

  • Facebook Follows Google, Signaling Online Ad Pain Set to Worsen

    Facebook Follows Google, Signaling Online Ad Pain Set to Worsen

    (Bloomberg) -- Facebook Inc.’s revenue held up better than expected in the early months of the Covid-19 pandemic. But the company warned that the worst of the slowdown in ad spending isn’t over, raising the prospect of a bigger hit across the digital-advertising market.Chief Financial Officer Dave Wehner noted the “potential for an even more severe advertising industry contraction.” His prediction is significant, given that Facebook accepts ads from all industries, and owns apps that now reach 3 billion people every month. There’s been a particular drop-off in the travel and auto industries, he said on Wednesday’s earnings call.Mark Zuckerberg, Facebook’s chief executive officer, underlined the concern, saying that if shelter-in-place orders end too soon, the economic fallout could be even more pronounced. “I worry that this could be worse than at least some people are predicting,” Zuckerberg said.The warnings from the world’s largest social network echoed those heard in earlier calls from Google parent Alphabet Inc. and Snap Inc.: While the first quarter remained upbeat, the real impact could come in a few months. Alphabet CFO Ruth Porat said the second quarter will be “difficult,” while Snap finance chief Derek Andersen last week spoke of “factors beyond our control.” Twitter Inc. on Thursday reported a 27% drop in sales from March 11 through the end of the quarter and said April showed similar results. The company said that improving its ad products is now a “top priority.”The comments from across the advertising-dependent part of the tech industry also portend the beginning of a trend -- for the first time, an uptick in user attention to an app doesn’t necessarily mean that ad growth will follow. They also indicate the visibility these companies have into the broader economy, where advertising revenues are a leading indicator of optimism about the future.During the Great Recession of the late 2000s, overall ad spending declined for two years straight, with annual digital advertising revenue dropping in 2009 for the first and only time, according to EMarketer. But most of the advertising industry thinks the coronavirus impact will be worse, the researcher said, citing a recent study by the Interactive Advertising Bureau.Facebook reported an 18% increase in first-quarter revenue, showing advertising demand was strong before the Covid-19 pandemic hit budgets. The results include just a few weeks in March when coronavirus lockdowns began to hammer the economy. The company also said business was steady in the first few weeks of April, sparking a surge in its shares in late trading.“After the initial steep decrease in advertising revenue in March, we have seen signs of stability,” the company said in a statement.Like Google and Snapchat, Facebook said it’s seeing a surge of usage and engagement as millions of people shelter in place and look for entertainment and ways to keep in touch online. Daily users of all Facebook’s apps, including Instagram and WhatsApp, averaged 2.36 billion in March, up from 2.26 billion in December, the company said. Facebook’s core social network now has 1.73 billion daily users, compared with 1.66 billion during the final month of 2019.For Facebook, the spike in usage will likely have less impact on its business than in prior quarters. Many of the company’s most popular features during the pandemic – including voice calling and direct messaging – are not areas where the company makes significant revenue. Facebook also gets more than half of its sales from small businesses, a group that is hit especially hard by the Covid-19 lockdown and recession.Snap may be more insulated from the downturn than Facebook and Twitter because it doesn’t have as many small advertisers, Jim Cridlin, global head of innovation and partnerships at WPP Plc’s Mindshare media agency, said last week. Though the company didn’t provide forecasts for the current period, it said advertising revenue was still growing, albeit at a slower pace.For its part, Google, which is heavily dependent on search and display advertising, has a more diversified business and therefore may have a greater cushion against a further slump in marketing budgets. Shares jumped following its own earnings report, which showed strong growth in cloud computing and at the YouTube digital-video site.The tech giants are navigating the pullback from advertising as their workers mostly remain at home, but they’re not advocating for a return to normal. When governments say it’s time to return to work, Facebook is likely to advise its employees to stay at home, Wehner said. Since the company can still ship products remotely, there’s no use overloading public transportation systems. Meanwhile, Facebook is thinking about how to reconfigure its offices, to ensure that once people are back, they are working at a safe distance from colleagues. “I think we’ll be more cautious,” Wehner said on Bloomberg Television.(Updates with Twitter results in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • WPP First Quarter Trading Update
    Business Wire

    WPP First Quarter Trading Update

    WPP (NYSE: WPP) today reported its 2020 First Quarter Trading Update.

  • Reuters - UK Focus

    COVID-19 drags WPP net sales down 7.9% in March, braces for bigger impact

    WPP, the world's biggest advertising company, said net sales fell 3.3% in the first quarter, with the impact of the COVID-19 pandemic dragging it down by 7.9% in March alone, prompting it to cut more costs. It said it expected the impact from COVID-19 to increase in the short term, but could not say by how much.

  • Ad giant WPP CEO: 'Our people are busier than they have ever been'
    Yahoo Finance

    Ad giant WPP CEO: 'Our people are busier than they have ever been'

    Yahoo Finance chats about the state of the advertising industry with its largest player. WPP CEO Mark Read shares his thoughts amidst the coronavirus pandemic.

  • I’d grab these FTSE 100 bargains for my new ISA allowance today

    I’d grab these FTSE 100 bargains for my new ISA allowance today

    This Fool runs the rule over two FTSE 100 bargains that look to offer the potential for large capital gains after recent declines. The post I'd grab these FTSE 100 bargains for my new ISA allowance today appeared first on The Motley Fool UK.

  • Forget Bitcoin and gold! I’m using this market crash as an opportunity to buy FTSE 100 shares

    Forget Bitcoin and gold! I’m using this market crash as an opportunity to buy FTSE 100 shares

    With the FTSE 100 down sharply in the last month, I think many of its members with recovery and growth potential are now looking cheap. The post Forget Bitcoin and gold! I’m using this market crash as an opportunity to buy FTSE 100 shares appeared first on The Motley Fool UK.

  • WPP Update re COVID-19
    Business Wire

    WPP Update re COVID-19

    WPP (NYSE: WPP) today issued the following update related to COVID-19.

  • What to watch: Oil price crash will cost Shell $800m, more companies axe dividends, and stocks rise
    Yahoo Finance UK

    What to watch: Oil price crash will cost Shell $800m, more companies axe dividends, and stocks rise

    A daily overview of the top business, market, and economic stories to watch in the UK, Europe, and abroad.

  • Coronavirus: World's largest ad agency WPP pulls 2020 outlook, dividends, and buybacks
    Yahoo Finance UK

    Coronavirus: World's largest ad agency WPP pulls 2020 outlook, dividends, and buybacks

    It is also launching a review of its costs to protect profitability from a fall in revenue.

  • Facebook Warning Shows Threat to Google as Ad Budgets Shrink

    Facebook Warning Shows Threat to Google as Ad Budgets Shrink

    (Bloomberg) -- Google and other digital advertising companies are seeing revenue growth wither as marketers slash spending ahead of an expected recession triggered by the coronavirus.The global pandemic and the ensuing slump in economic activity is crushing several industries that have been big buyers of Google and Facebook Inc. ads, including online travel agents, automakers, restaurants and retail.“I’m hearing some big numbers, with ad spending down 30% to 50% across the board,” said Rob Griffin, founder of digital ad consulting firm G5 Futures. Some marketers will slash budgets by 80% or 90%, while others may stop for a while if they’re in sectors that are particularly hard hit, he added.Millions of people are sheltering at home and spending more time on social media, video streaming and other online services. That’s increasing the amount of digital ad space, but demand for those marketing spots is weak, so prices are falling.“The consumption is irrelevant, it’s completely irrelevant,” said Brian Wieser, president of business intelligence for GroupM, the media buying arm of advertising giant WPP Plc. “The total amount of money available is independent of viewership trends.”Facebook warned on Tuesday that its ad business is weakening in countries that are aggressively fighting the virus. Many of its services are being used more, such as messaging, but they don’t run ads, the company added. The day before, Twitter Inc. said usage has jumped, but global advertising is curbed, forcing the social-media company to slash its sales forecast and project a loss in the current quarter.“The sudden impact of the COVID-19 virus will ripple through the ad market,” Michael Nathanson, an analyst at Moffettnathanson LLC, wrote in a note to investors. “Given the sheer size of digital ad spending in today’s marketplace (i.e., more than 50% of all ad spend is now digital), we would expect other digital platforms to see significant deceleration in ad revenues in the coming months.”“We would suggest investors avoid catching falling knives at Google and Facebook,” he added.Google declined to comment on its ad business on Tuesday. On the company’s YouTube video service, viewing has jumped in the past week, but CPMs, the industry’s way of measuring ad prices, fell as much as 8%, according to one digital media executive who asked not to be identified discussing private figures.Shares of Google parent Alphabet Inc. and Facebook are down about 25% since the middle of February, so some of the digital ad downturn may already been priced in. Facebook stock dipped about 1% in extended trading after its warning. Alphabet was little changed.Longer term, Google and Facebook have big cash hoards and little debt, so they can withstand a deep recession, according to Bloomberg Intelligence internet analyst Jitendra Waral.The last major economic downturn was a boon to these companies. The 2008 financial crisis triggered a similar slump in advertising, but much of that was focused on traditional media. Online platforms took advantage of the moment, and pitched their ads as cheaper, more-targeted alternatives. Now, digital ads take in more than $300 billion a year from the largest corporations to the smallest businesses. Google and Facebook account for more than half of that, according to research firm EMarketer.Singapore Shuts Bars; India on Nationwide Lockdown: Virus UpdateLast week, as the scale of the crisis hit home, ad agency executives worked the phones, trying to help clients figure out what to do next. Some pulled out completely while others raced to adjust the tone of their ads.“You have industries that were extremely active as of a week ago come to a screeching halt: restaurants, travel, retail,” said Doug Rozen, chief media officer at advertising agency 360i. Other companies are still spending, but being more conservative, he added.Google and Facebook derive much of their revenue from small businesses, thousands of which could shut if a deep recession sets in. Both internet companies offer self-service ad platforms that can be switched off quickly.“Advertising is the easiest expense to cut, you can literally log into Google Ads and turn it off and start saving money,” said Ari Paparo, head of digital ad firm Beeswax Inc. and a former Google executive.Amazon.com Inc. recently cut back drastically on how much money it spends on Google ads. The online retailer is one of Google’s largest ad buyers, usually snapping up product listing ads to lure web shoppers to Amazon.Expedia Group Inc. and Booking Holdings Inc. each spend hundreds of millions of dollars a year marketing on Google, but these online travel agents have been hammered by the abrupt halt in flights, business trips and vacations.Booking Withdraws Already-Bleak Forecast, Citing CoronavirusBooking Holdings has pulled back “materially” on brand advertising, RBC Capital Markets analyst Mark Mahaney wrote in a recent research note after meeting executives from the online travel company. The industry accounts for about 10% to 15% of Google’s ad revenue, with Booking and Expedia accounting for about 3% each, Mahaney estimates.Even businesses that don’t sell through the internet often purchase Google ads to encourage people to visit their brick-and-mortar locations. Last week, Being Yoga, a yoga studio about 15 miles south of San Francisco, was still buying Google search ads, based on the query “yoga near me,” despite being closed. Bloomberg News contacted the business, which said it had forgotten to switch the ads off.Retailers often buy Google local inventory ads that show online shoppers whether products are stocked in nearby stores. With many non-essential retailers shutting locations, demand for these ads may slow.“If stores are closed, we absolutely recommend they turn off local inventory ads,” a Google spokeswoman said.Real numbers showing the virus’ impact are beginning to emerge from China, which was hit first and shut down travel and non-essential businesses weeks ago.Advertising sales on China’s big digital platforms are projected to drop 20% to 30% in the first quarter of the year, WPP’s Wieser said. Automobile ads slumped 79% in China in February, a far steeper decline than any time during the 2008 financial crisis, he also noted. Most Google services are unavailable in mainland China, but in the rest of the world, automakers are another big ad customer.Even industries that are seeing higher demand, like consumer goods, are unlikely to advertise more right now. “Why would you advertise toilet paper right now? It’s not helpful,” Wieser said. “They want to curtail demand.”(Updates with YouTube ad prices in ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters - UK Focus

    Advertisers stare into the coronavirus abyss

    The cancellation of major sporting events and the decimation of the luxury, entertainment and travel industries is delivering a hammer blow to a global advertising industry that was already reeling from years of tech-led turmoil. Advertising executives told Reuters that clients are pulling campaigns, photo shoots for glossy magazines are off and major brands are cutting budgets to conserve cash after the outbreak upended the way consumers go about their daily lives. The sudden withdrawal of a chunk of the $600 billon of pure advertising money that goes via agencies onto media platforms such as Facebook and Google, broadcasters, magazines and billboards will be felt far and wide.

  • Why Wpp's share price is at risk

    Why Wpp's share price is at risk

    “At the end of the day, the most important thing is how good are you at risk control.” So said legendary stock trader Paul Tudor Jones. Investors would do well8230;

  • A Sliding Share Price Has Us Looking At WPP plc's (LON:WPP) P/E Ratio
    Simply Wall St.

    A Sliding Share Price Has Us Looking At WPP plc's (LON:WPP) P/E Ratio

    Unfortunately for some shareholders, the WPP (LON:WPP) share price has dived 34% in the last thirty days. The recent...

  • Ad Week Europe in London delayed over coronavirus fears
    Yahoo Finance UK

    Ad Week Europe in London delayed over coronavirus fears

    The delay came as events company Informa said over 100 events, worth £400m, have so far been pushed back due to the spread of COVID-19.

  • WPP Acquires Data Science Firm Sandtable
    Business Wire

    WPP Acquires Data Science Firm Sandtable

    WPP (NYSE:WPP) announces today that GroupM has acquired Sandtable, the data science company that specialises in behavioural analytics and advanced simulations.

  • WPP plc Just Missed EPS By 37%: Here's What Analysts Think Will Happen Next
    Simply Wall St.

    WPP plc Just Missed EPS By 37%: Here's What Analysts Think Will Happen Next

    One of the biggest stories of last week was how WPP plc (LON:WPP) shares plunged 22% in the week since its latest...

  • Reuters - UK Focus

    LIVE MARKETS-Closing snapshot: "It's a classic sell-off"

    You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan. On the bright side, the STOXX 600 which ONLY fell 3.6% after falling close to 5%, is NOT in correction territory anymore.

  • Reuters - UK Focus

    LIVE MARKETS-Worst week since the sovereign debt debacle

    * Asian shares extend losses Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters. You can share your thoughts with Thyagaraju Adinarayan (thyagaraju.adinarayan@tr.com), Joice Alves (joice.alves@tr.com), Julien Ponthus (julien.ponthus@tr.com) in London and Danilo Masoni (danilo.masoni@tr.com) in Milan. Things got so bad that European market authorities had to intervene to ban short selling of banks.

  • The Market Rout Is About More Than Coronavirus

    The Market Rout Is About More Than Coronavirus

    (Bloomberg Opinion) -- European companies were running to stand still even before they started worrying about the impact of the coronavirus. If investors weren’t preoccupied with the disease, the corporate sector’s weak growth, poor profitability and tendency to do overpriced acquisitions would be front of mind. Ad group WPP Plc failed to grow underlying sales last year and was guiding for another flat performance in 2020 even before the coronavirus spread. Brewer Anheuser-Busch InBev SA made less profit in the last three months of 2019 than analysts expected. Reckitt Benckiser Group Plc’s new chief executive officer completed a kitchen sinking on Thursday by taking a 5 billion-pound ($6.5 billion) writedown on a $17 billion acquisition led by his predecessor. He also admitted that profit margins — fueled by one cost-cutting deal after another — were unsustainable. Investors are meanwhile being asked to bail out past mistakes. German pharma group Bayer AG cautioned that it may need to raise some equity to settle lawsuits relating to the Roundup glyphosate weedkiller inherited with its overpriced $66 billion acquisition of Monsanto Co. Aston Martin Lagonda Global Holdings Plc priced an emergency equity offering at 89% below the price of the luxury carmaker’s 2018 initial public offering, having failed to match its capital structure to its business plan.It’s tempting to dismiss each of these situations as company specific. But they collectively reinforce the impression that the corporate cycle has peaked, growth expectations are elevated, IPOs were done at undeserved prices and acquisitions made in the recent past may not deliver as promised. The owner of WeWork may have failed to list in New York last year, but attempting such an ambitious IPO still had a very top-of-the-market feel.The valuation of the European stock market, at about 14.5 times forward earnings, leaves little margin for error, say analysts at UBS Group AG. If this year’s earnings are 2% lower than expected, the market would be trading at its historical average, they say. The snag is that this is a small cushion given earnings expectations have been coming down in recent months. For their part, the UBS analysts caution that consensus earnings estimates are still too high.The immediate priority for European CEOs right now is to protect their workforces and defend their businesses while marshaling a proportionate and reasoned response to the threat of the coronavirus. When that challenge abates, they will have to return to addressing weak growth and pressure on profitability. That will in turn sustain the incentive to do M&A as a means of supporting earnings through cost-cutting, with all the risk of overpaying and writing down the acquisition years later. On the latest evidence, that cycle is hard to break out of.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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