By Nate Wolf
Omnicom Group was the top performer in the S&P 500 Thursday after the marketing conglomerate reported a jump in revenue after its merger with Interpublic Group and authorized a huge stock buyback.
Omnicom posted revenue of $5.5 billion in the fourth quarter, up almost 28% from last year. The inclusion of Interpublic revenue after the two companies closed their merger in November accounted for the bulk of the jump. The combined company also delivered organic growth of roughly 4% in the quarter, management estimated.
The pair agreed to the blockbuster transaction in December of 2024. The stock-for-stock deal gave Omnicom shareholders 60.6% ownership of the combined company, with Interpublic shareholders controlling the other 39.4%.
Shares soared 14% to $79.86 on Thursday, putting the stock on pace for its best day since 2022, according to Dow Jones Market Data. Investors seem so pleased with the trajectory of the new-look Omnicom that they were willing to overlook a miss on earnings.
Adjusted earnings were $2.59 a share for the quarter, below analysts' consensus call of $2.72, according to FactSet. The company reported a net loss of $941 million on an unadjusted basis after factoring in costs related to the merger.
"Since the successful closing of the Interpublic acquisition on November 26, we made key leadership and brand announcements, refreshed our enterprise growth strategy, and launched the next generation of our Omni data and technology platform," said CEO John Wren.
Omnicom is now targeting annual cost synergies from the merger of $1.5 billion over the next 30 months, including $900 million in savings in 2026. The company had previously aimed at synergies of $750 million in that 30-month span.
Another positive for shareholders: The board authorized a $5 billion share buyback, including a $2.5 billion accelerated repurchase. The final settlement of the accelerated buyback transactions is expected to happen by the end of the second quarter.
The buyback and new cost-synergy target "should deliver a meaningful uplift to earnings," UBS analyst Jo Barnet-Lamb wrote in a research note Thursday.
Shareholders will now watch closely for more detail on operational performance and fiscal 2026 expectations at Omnicom's investor day on March 12, Barnet-Lamb said. UBS has a Buy rating and a $108 price target on the stock.
Write to Nate Wolf at nate.wolf@barrons.com
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(END) Dow Jones Newswires
February 19, 2026 11:53 ET (16:53 GMT)
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