The Zacks Analyst Blog Highlights: Interpublic Group, Omnicom Group, WPP plc, E.I. du Pont de Nemours and Company and The Dow Chemical Company

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Feb 03, 2012, 09:30 ET

CHICAGO, Feb. 3, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Interpublic Group (NYSE: IPG), Omnicom Group Inc. (NYSE: OMC), WPP plc (Nasdaq: WPPGY), E.I. du Pont de Nemours and Company (NYSE: DD) and The Dow Chemical Company (NYSE: DOW).

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Here are highlights from Thursday's Analyst Blog:

IPG on Buying Spree, Eyes EU

Interpublic Group (NYSE: IPG), one of the world's leading organizations of advertising agencies and marketing service provider, recently announced acquisition of FUSE, a digital and interactive agency based in the UK. With this acquisition, FUSE will now add strength to Interpublic's GolinHarris network (GH International); being a part of the company's current digital and interactive capabilities.

The advertising industry has become even more competitive and dynamic with rapid propagation of media channels and acceleration of interactive technology development. In order to withstand the competitive pressures, big banners like Interpublic group are needed to gear up for addressing more widespread mass audiences in a cost-effective way.

In such a scenario, FUSE acquisition is anticipated to significantly strengthen digital, interactive and creative offerings. The added capabilities will allow optimal and affordable solution to its clients, designing a customized mix of advertising and marketing communications services purposefully.

FUSE has been successfully blending the art of design with the power of technology to create unique digital experiences since 2004. Its offices in London and San Francisco serve clients, such as Unilever, Bissell, Tia Maria, Top Trumps and Dove. GolinHarris (GH), on the other hand addresses the increasing influence of digital and social media in communications.

The agency's new g4 model with dedicated specialists -- strategists, creators, catalysts and connectors -- are embedded in one seamless package delivering value, while strengthening client relationship.

FUSE will merge its employees and operations with GolinHarris' offices in London but will retain its name. FUSE's founders Doug Ayres, Simon Hobbs and Jon Meggitt will lead the company and report to Jonathan Hughes, president, GH International. The terms of the deal were not yet disclosed.

Few days earlier, Interpublic Group also announced the acquisition of a leading German Consumer Lifestyle Agency, Nicole Weber Communications (NWC), which has offices in Hamburg and Munich. With this acquisition, NWC also became a part of the IPG's GolinHarris network; adding new resources to help sustain the agency's strong growth trajectory.

Since 1996, NWC specializes in consumer public relations and lifestyle marketing. Their strong consumer lifestyle capabilities will complement GH International's existing financial and corporate communications practices in Frankfurt. The acquisition will strengthen IPG's future growth strategy in Europe, expanding their German market share while teaming up with NWC.

On the other hand, NWC has been serving major national and international brands, including Henkel Cosmetics, Renault, Asos.de, Coral Mexx, Pringle of Scotland, Campari and Hendrick's Gin, among others. With this acquisition, these clients will be able to expand their global reach and access to higher level to creativity and innovation.

Interpublic Group continues to look for strategic investments in order to diversify across emerging markets and capitalize on technological collaboration/integration across agencies. We believe such acquisitions will position the company for future growth and profitability, challenging the cutthroat business environment.

IPG delivered strong organic revenue growth during the third quarter of fiscal 2011 driven by a strategic business mix, across all marketing disciplines, across domestic as well as major international economies. The company directly competes with its peers, such as Omnicom Group Inc. (NYSE: OMC), Publicis Groupe SA and WPP plc (Nasdaq: WPPGY).

DuPont & Suntech Join Forces

E.I. du Pont de Nemours and Company (NYSE: DD) and Suntech Power Holdings entered into a strategic agreement with an overall goal of augmenting the supply of PV materials and technologies in the global solar energy market.

The agreement specifically focuses on technology advancements, supply chain optimization, cost reduction initiatives as well as DuPont's Tedlar polyvinyl fluoride film supply.

Further, DuPont and Suntech are engaged in co-marketing opportunities in order to further promote a faster and broader use of solar energy, and its adoption worldwide.

The companies have worked together in the past with DuPont providing its Solamet PV metallization pastes for Suntech's solar cells and DuPont's Tedlar polyvinyl fluoride film for protective backsheets on Suntech's solar modules.

On January 24, 2012, DuPont reported earnings of 35 cents per share in the fourth quarter of 2011 compared with 50 cents in the year-ago quarter. The profit exceeded the Zacks Consensus Estimate of 33 cents per share.

Sales in the quarter grew 14% to $8.4 billion due to 14% increase in prices. Further, the agriculture segment also contributed significantly to the sales increase. The quarter witnessed declining sales volumes due to destocking in photovoltaics, polymer and industrial supply chains. The consumer electronics and construction division also faced soft demand.

Despite soft demand for consumer electronics segment and weak markets for housing and construction, DuPont delivered exceptional results for full-year 2011. We believe that the slowdown in global economic growth could reduce the company's capital spending, thereby adversely affecting its operating performance.

However, markets for DuPont's agriculture and food businesses continue to be strong, especially with a strong planting season in Latin America.

The company faces stiff competition from The Dow Chemical Company (NYSE: DOW).

In view of the above stated reasons, the company retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating. Currently, we hold a long-term (more than 6 months) Neutral recommendation.

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