WPP closed the ad holdcos'' results season with strong performance WPP reported a good set of numbers with Q4 22 organic growth at +6.4% (versus consensus at +5%), implying a c10% 3y stack (in line with Interpublic Q4, versus Publicis at 15% and Omnicom at +7% 3y stack). FY22 margins came in line with expectations at 14.8% efficiency savings, supporting investment and margin expansion. Bottom-line adjusted diluted EPS came 3% above consensus. Guidance: unsurprisingly good organic growth, ambitious margin expansion Management guided for organic net sales growth from 3% to 5% for FY23, in line with Publicis and Omnicom earlier this month. However, in our view, the positive surprise was the margin guidance of ''around 15%'' (consensus was a touch below that), suggesting a 20bps margin improvement. Forecast changes We have upgraded our organic growth and margin forecasts to reflect the company''s guidance for FY23. We now stand at +4% organic net sales growth (mid-point of guidance) and at 15% on margins (from 14.6% in our previous model). We also reflect the change in treatment of the Kantar associate (no longer included in the Headline PBIT) and a more conservative buyback policy for FY23. Bottom-line, we increase our EPS by 7%/4% 23e/24e. We also increase our DCF-based target price by 18% from GBP820p to GBP965p, higher than our EPS increase, reflecting improving fundamentals. We remain Neutral on WPP We remain broadly supportive of the ad agency subsegment, where we see a real change of paradigm in both the normalised level of growth and its positioning in the value chain. Although we would be supportive of a broad rerating, we are happy to remain Neutral on WPP reflecting 1) historically less ambitious revenue diversification strategy and 2) the company is a late comer in its cost transformation versus peers. We rate WPP Neutral.