Q2 results likely to be good, although broadly expected Last year''s Q2 is the toughest comparative for all agencies, as it marked the steepest rebound from COVID-19. Despite growing concerns about a slowing ad market, agencies'' messages have been reassuring, indicating that Q2 should reflect continued momentum. For the second quarter, we expect 7% organic net revenue growth for both WPP and Publicis Groupe. What about H2? The jury''s still out, but we are among the optimists for FY22e That agency growth is slowing and may land in negative territory in the quarters to come has become consensual. What is less consensual is the timing and the extent to which agencies will be impacted by the macroeconomic headwinds. We are among the optimists for H2, on the back of: i) new contracts flowing into agency revenues; ii) clients'' price increases boosting media revenues; and iii) our work on agency clients'' suggesting better resilience in digital marketing spending and good confidence regarding inflation risks. Forecast changes We have increased our FY22 expectations for both WPP and Publicis Groupe. We now expect 5.9% organic net revenue growth for WPP and 5.7% for Publicis Groupe for FY22e. At the margin level we stand a touch below the top end of guidance for WPP at 14.8%, and in line with company guidance for Publicis Groupe at 17.5%. We rate Publicis Groupe Outperform and WPP Neutral PUB/WPP have underperformed the sector by 10%/16% and now trade on 8x PE, yet the FY22e EPS for both has remained broadly stable. We leave our target price for both companies unchanged. With valuation still relatively inexpensive, we see a more favourable risk/reward and reiterate our Outperform stance. On WPP, we keep our Neutral rating.