Omnicom (OMC) 2Q26 Core revenues slightly below due to prior year restatement while organic growth improved

Equity Research 29 July 2026 | 5:40AM BST

Omnicom (OMC): 2Q26 Core revenues slightly below due to prior-year restatement while organic growth improved; expect underlying

Results vs expectations Adam Berlin | Revenue: Omnicom reported 2Q26 core revenue of $5,995m, c1% below consensus Goldman Sachs International expectations. The revenue miss was due to c$200m more of 2Q25 pro forma James Tate revenue being classified as held for sale than had been previously guided for; this was | Goldman Sachs International partially offset by higher core organic revenue growth than expected. Organic revenue growth was 6.1% vs Visible Alpha Consensus Data of 3.6%. The strong Pulkit Gubgotra | organic growth was driven by double-digit growth in Media and Experiential, Goldman Sachs India SPL partially offset by high-single-digit declines in Advertising.

Non-core revenues were $567.5m, ahead of GSe/cons (at $400mn/$356mn). As a result, reported revenue was 2% ahead of consensus.

Margins: Core adj. EBITA was $1,069m, 8% below our expectations, with a margin of 17.8% (vs. GSe at 19.1%). Group adj. EBITA (incl. non-core ops) was $1,127m, -6%/-2% below Gse/cons. Opex in the core business grew c5% yoy, despite the delivery of synergies of c$200m in the quarter. This implies there was a step-up in underlying opex growth vs Q1’26.

Guidance: Omnicom said it is now selling $3.5bn-$3.6bn of 2025 pro forma revenue vs $3.2bn previously. The company had already sold $2bn of this revenue by the end of July. There will be c$300m of revenue from assets held for sale in Q3’26 and c$200m in Q4. The company also increased its organic growth guidance for core revenues from c4% to 4.5%-5.0%. It said it would buy back an additional $500m of shares during the rest of the year, with c$3bn already completed. There was no change to guidance on synergies and investment. Net finance costs will increase by $170m yoy. Management expects a high-teens increase in EPS vs $8.65 in 2025.

Estimate changes We cut our FY26/FY27e EPS by 3-6% to reflect: (1) an 80bp lower 2026 core adj EBITA margin, reflecting softer Q2’26 margins than we were expecting; (2) a smaller 2026 buyback. The company guided for a $3.5bn buyback in 2026 overall, and we had previously expected $4bn; and (3) $10m higher finance costs in 2026. We also now factor in a working capital outflow of c$900m in 2026, given that H1’26 working capital outflows were $1bn higher yoy.

Our revised FY26/FY27 EPS is 4%/1% below Visible Alpha Consensus Data (pre-results).

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We reiterate our Buy rating on Omnicom. Shares trade on an attractive FCF yield (15%), and we think the company will continue to deliver healthy organic revenue growth. We believe the healthy underlying performance will become more visible in 2027, once disposals have been concluded.

Our 12-month target price is slightly reduced to $138 (vs. $146 prev.), mainly to reflect the working capital outflows in 2026 and the small EPS cuts.

Likely investor reaction 2Q26 results were complicated by a restatement of prior-period “core” revenue, given that the company decided to hold more assets for sale. While there were c$200m more revenues held for sale in Q2 than previously guided, based on commentary on the call, we think there will be only c$100m more in Q3. The result was that, while organic growth was stronger than expected, there was a c1% revenue miss vs consensus.

We had also expected to see c250bps of core margin expansion in the quarter, but we saw only 190bps, suggesting the company is growing opex (ex-synergies) slightly faster than we expected. As a result, our new forecasts for 2027 core EBITA are 1-2% lower than consensus. We would…