Shares of Omnicom (OMC) are sliding after Morgan Stanley analyst Benjamin Swinburne downgraded the stock to Underweight, the firm’s equivalent to a sell rating, as he contends that “lower for longer is the new normal” for advertising agencies. The analyst also cut his price target on peer Interpublic Group (IPG), while nothing he disagrees with the consensus view that organic growth will return for the industry in 2018.

SELL OMNICOM: In a research note to investors this morning, Morgan Stanley’s Swinburne downgraded Omnicom to Underweight from Equal Weight and lowered his price target on the shares to $72 from $86. The analyst pointed out that he disagrees with the consensus view that organic growth will return for the industry in 2018, and thinks “lower for longer” is the “new normal.” Swinburne argued that ad agencies are part of the supply chain to major brands pressured by shifting consumer behavior driven by Amazon (AMZN) and other tech platforms. Year-over-year organic growth is already negative in the U.S. market, and seven years into an economic expansion the analyst believes consensus estimates are too high. In addition to accelerating top line growth, consensus also bakes in continued margin expansion, which Swinburn believes will become more challenging to achieve. The analyst also told investors that he sees growing risk from major consulting firms, particularly Accenture (ACN) but also IBM (IBM), who are attempting to capture marketing budget that might have otherwise gone to agencies. Swinburne also cut his price target on peer Interpublic Group to $22 from $24, but kept an Equal Weight rating on that stock to account for its strategic optionality. Interpublic Group’s relatively smaller size makes it likely the only “digestible” holding company, he contended.

PRICE ACTION: In morning trading, shares of Omnicom dropped over 2% to $73.39, while Interpublic has slipped about 1.6% to $20.50.