Merrill Ups Omnicom to 'Near Term Strong Buy'

Analyst Lauren Rich Fine thinks the market's overreaction to news that a board member is resigning leads to a strong buying opportunity

Merrill Lynch upgraded Omnicom (OMC ) to near term strong buy from buy.

On Thursday the stock was weak on an unconfirmed rumors of accounting irregularities. Analyst Lauren Rich Fine says shares fell about 6% on Thursday as the company's 8-K revealed that an ouside director, Robert Callander, head of audit committee, resigned from the board. Rich Fine believes this led to unfounded rumors. In talks with management, Rich Fine concluded that Mr. Callander resigned because at age 72, he probably wouldn't stand for re-election next year. She thinks the overreaction of news has led to an excellent entry point -- one that doesn't come along often. She sees $3.45 2002 earnings per share and $3.95 for 2003. She is keeping her long term strong buy rating.

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