As of June 5, 2025, Omnicom Group Inc has a Discounted Cash Flow (DCF) derived fair value of $125.62 per share. With the current market price at $71.21, this represents a potential upside of 76.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $114.22 |
| DCF Fair Value (10-year) | $125.62 |
| Potential Upside (5-year) | 60.4% |
| Potential Upside (10-year) | 76.4% |
| Discount Rate (WACC) | 6.7% - 8.7% |
Revenue is projected to grow from $15689 million in 12-2024 to $20144 million by 12-2034, representing a compound annual growth rate of approximately 2.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 15689 | 7% |
| 12-2025 | 15948 | 2% |
| 12-2026 | 16267 | 2% |
| 12-2027 | 16592 | 2% |
| 12-2028 | 17210 | 4% |
| 12-2029 | 17554 | 2% |
| 12-2030 | 17905 | 2% |
| 12-2031 | 18263 | 2% |
| 12-2032 | 18698 | 2% |
| 12-2033 | 19072 | 2% |
| 12-2034 | 20144 | 6% |
Net profit margin is expected to improve from 10% in 12-2024 to 10% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 1567 | 10% |
| 12-2025 | 1593 | 10% |
| 12-2026 | 1625 | 10% |
| 12-2027 | 1657 | 10% |
| 12-2028 | 1719 | 10% |
| 12-2029 | 1753 | 10% |
| 12-2030 | 1788 | 10% |
| 12-2031 | 1824 | 10% |
| 12-2032 | 1868 | 10% |
| 12-2033 | 1905 | 10% |
| 12-2034 | 2012 | 10% |
with a 5-year average of $208 million. Projected CapEx is expected to maintain at approximately 1% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 239 |
| 12-2026 | 152 |
| 12-2027 | 185 |
| 12-2028 | 218 |
| 12-2029 | 241 |
| 12-2030 | 247 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 228 |
| Days Inventory | 25 |
| Days Payables | 395 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 1873 | 427 | 172 | (125) | 1398 |
| 2026 | 2456 | 581 | 235 | 15 | 1625 |
| 2027 | 2534 | 593 | 239 | (22) | 1724 |
| 2028 | 2655 | 615 | 248 | (94) | 1887 |
| 2029 | 2727 | 627 | 253 | (24) | 1870 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 114.22 | 60.4% |
| 10-Year DCF (Growth) | 125.62 | 76.4% |
| 5-Year DCF (EBITDA) | 92.82 | 30.3% |
| 10-Year DCF (EBITDA) | 108.08 | 51.8% |
Is Omnicom Group Inc (OMC) a buy or a sell? Omnicom Group Inc is definitely a buy. Based on our DCF analysis, Omnicom Group Inc (OMC) appears to be significantly undervalued with upside potential of 76.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $71.21.