Stagwell initiated with a Neutral at Goldman Sachs

Goldman Sachs analyst Michael Ng initiated coverage of Stagwell with a Neutral rating and $6.50 price target as part of a broader research note on U.S. Media names. The U.S. media industry is in a state of transition given increasing content competition from streaming, social, and mega tech as well as technology disruptions in distribution, and the firm prefers U.S. media stocks with deep competitive moats that should provide better visibility into growth, the analyst tells investors in a research note. The strength of Stagwell advocacy business will contribute to near-term organic growth recovery, though the company’s long-term organic growth outlook will face pressure from increasing competition from larger peer agencies as digital spending tailwinds incentivize continued investment in digital capabilities and limited international market penetration, Goldman Sachs added.