Paris-headquartered agency holding company Havas (main assets: the Euro RSCG, Arnold Partners and Media Planning Group networks) will see its first quarter revenues drop by up to 13.3%, predicted investment bank Morgan Stanley on Thursday.

The bank’s prognostication appears to be based on little more than the continued weakness of the European advertising and marketing sectors. Yet, “curiouser and curiouser,” as Lewis Carroll’s Alice famously opined, Morgan Stanley not only hailed Havas as “well placed to benefit from any increase in adspend volumes,” it also decided to upgrade Havas stock from ‘underweight’ to’overweight’.

Referring to the general global downturn in advertising, the bank stated: “We believe that agencies have responded to this downturn in advertising spend by increasing their breadth of service as much as possible, in order to increase their share of falling marketing budgets. Havas' strategy is a good example.”

The bank then switched to gloom mode about the European ad industry in general: “[It] would continue to suffer as the value of the euro continues to fall, while first-quarter revenues will be disappointing compared with the last quarter of 2002.”

Which fails to explain, in the case of Havas, Morgan’s inexplicably precise revenue prediction. Thirteen point three percent – as opposed to point one or point seven percent. Perhaps the decimal point adds credibility to a wild guess?

To complete the Alice analogy, following the bank’s statement, Havas shares edged up on the Paris bourse by 1.7% to €2.92 ($3.18; £2.02)

Data sourced from: BrandRepublic (UK); additional content by WARC staff