WPP (LSE:WPP) shares have had a rough few years, and the company even lost its FTSE 100 status at the end of 2025 as its market-cap shrank massively. And yet, following its latest half-year results, the media stock has just surged more than 30% over the last week or so!
What’s going on? And could global media/ad agency WPP secretly be about to rejoin the UK’s flagship index?
Climbing back up the ranks
Now that its market-cap has recovered to £4.44bn, WPP sits as the second-largest company in the FTSE 250, trailing only easyJet.
As such, it’s actually trading at a valuation that’s higher than the bottom six companies in the FTSE 100. And if it continues to climb beyond the bottom 10 stocks, WPP could become a prime candidate to rejoin the large-cap index as early as the September review next month.
So how did the business turn things around so dramatically?
Exploring the fall and rise of WPP
WPP’s earlier decline has been years in the making. Even after its recent bounce back, the firm’s market-cap is still nowhere near the £24bn threshold it sat at back in 2017. And it’s been driven largely by clients cutting agency spending, shifting budgets toward in-house teams, and the broader advertising industry grappling with disruption from AI and changing media habits.
Consequently, revenue kept shrinking and, unsurprisingly, investor confidence eroded along with it. Yet that might now be all about to change. Earlier this month, management published the group’s half-year results for 2026, and it gave investors a genuine reason for optimism.
While revenue less pass-through costs still fell by 4.7%, the pace of decline eased sharply in the second quarter, down just 2.8%. And at the same time, thanks to cost-cutting initiatives, operating profit margin actually expanded from 3.3% to 4.1%, enabling a powerful 18.1% rally in earnings to £261m.
Overall, the firm remains on track to deliver a total of £100m gross annual savings this year, on track to hit as much as £500m by the end of 2028 through its ‘Elevate28’ restructuring plan. But with tangible results already materialising, there’s growing bullish sentiment that we might have reached an inflexion point.
As management puts it:
“While legacy account losses continue to weigh, Q2 saw a further sequential improvement in LFL growth, highlighting the momentum we are building”.
However, it’s important not to get too excited, too quickly. Legacy client losses are still an ongoing problem, and current guidance suggests that a return to organic growth likely won’t happen until 2027. In the meantime, that means net sales are still vulnerable to shrinking further.
So the question now becomes, is this a risk worth considering?
Wait and see?
There’s justified excitement building around this recovery story, and a return to the FTSE 100 would be a symbolic milestone worth celebrating. But with revenue still shrinking and the turnaround only in its early stabilisation phase, I’m not ready to jump aboard just yet.
If WPP can keep executing and building on its new-found momentum, I might have to reconsider. Yet for now, I think this is a business worth watching closely, but there are other more promising opportunities to explore. Such as…
Should you invest £5,000 in WPP right now?
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Zaven Boyrazian does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
