Marsh & McLennan Making Do

Marsh & McLennan's (MMC) 4Q08 adjusted operating income from continuing operations came in at $192 million, or $0.37 per share, 5 pennies ahead of our estimates. Strong margin improvement in the Risk and Insurance Services coupled with improved client retention was impressive during the quarter despite interest rate declines and the strengthening of the US dollar.

Also, the company experienced decent expense reduction as a result of its well-executed restructuring initiatives. The results for coming quarters should somewhat benefit from improved pricing, which will be largely offset by recent strength of the US dollar and reduced revenues from the consulting business, due to ongoing weakness in economy.

As such, we maintain our Hold recommendation on the shares with a 6-month target price of $19.25 per share.

Read the full analyst report on MMC