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Over the last 12 months, European media and advertising stocks have materially underperformed the broader European equity market. Names such as Publicis and WPP have been particularly avoided, weighed down by two dominant narratives: potential substitution from generative AI, and increasingly “walled” access to data as platforms like Google and Meta tighten control.

Yesterday, Publicis fell another ~9% despite solid results, as the market focused on an outlook that was perceived as cautious for the year ahead. In our view, this kind of move can create opportunity.

Publicis remains a clear global leader (the third-largest advertising group worldwide), with strong positions in attractive segments — notably US media-buying, which is structurally higher margin. The company continues to grow (+5.9% organic growth in Q4 2025 alone), holds net cash on its balance sheet, generates an ROE of ~16.6%, and now trades below 10x 12-month forward earnings.

Against this backdrop, we increased our position in our European Value Fund at ECP.