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Willis Towers (WLTW): What's in Store this Earnings Season?
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Willis Towers Watson Public Limited Company is slated to report third-quarter 2016 results on Nov 4, before the market opens. Last quarter, the company posted a positive earnings surprise of 4.40%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Willis Towers is likely to witness a rise in operating expenses this time around, which might lead to contraction of operating margins in the to-be-reported quarter.
Moreover, the company’s initiatives to boost inorganic growth led to lower-than-expected earnings accretion, which is likely to weigh on overall results.
In addition, the company’s restructuring costs are likely to have gone up in the third quarter owing to the process of implementing the Operational Improvement Program. Also, interest expenses are likely to have increased, owing to increase in debt level.
However, Willis Towers’ core strengths as well as strategic acquisitions should support top-line improvement. Costs and tax synergies should also support results. Also, continued share buy back should aid the bottom line.
With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, but with an average miss of 3.57%.
Our proven model does not conclusively show that Willis Towers is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Willis Towers has an Earnings ESP of -5.83%. This is because the Most Accurate estimate is pegged at 97 cents, while the Zacks Consensus Estimate stands at $1.03. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Willis Towers carries a Zacks Rank #3. Though the company has a favorable Zacks Rank, its negative ESP complicates surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Currently, the stock is trading at $122.97. We expect the earnings release to lead to stock movement.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Ares Management, L.P. (ARES - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #3. The company is set to report third-quarter earnings on Nov 7.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +2.82% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 8.
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Willis Towers (WLTW): What's in Store this Earnings Season?
Willis Towers Watson Public Limited Company is slated to report third-quarter 2016 results on Nov 4, before the market opens. Last quarter, the company posted a positive earnings surprise of 4.40%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Willis Towers is likely to witness a rise in operating expenses this time around, which might lead to contraction of operating margins in the to-be-reported quarter.
Moreover, the company’s initiatives to boost inorganic growth led to lower-than-expected earnings accretion, which is likely to weigh on overall results.
In addition, the company’s restructuring costs are likely to have gone up in the third quarter owing to the process of implementing the Operational Improvement Program. Also, interest expenses are likely to have increased, owing to increase in debt level.
However, Willis Towers’ core strengths as well as strategic acquisitions should support top-line improvement. Costs and tax synergies should also support results. Also, continued share buy back should aid the bottom line.
With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, but with an average miss of 3.57%.
WILLIS TWRS WAT Price and EPS Surprise
WILLIS TWRS WAT Price and EPS Surprise | WILLIS TWRS WAT Quote
Earnings Whispers
Our proven model does not conclusively show that Willis Towers is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Willis Towers has an Earnings ESP of -5.83%. This is because the Most Accurate estimate is pegged at 97 cents, while the Zacks Consensus Estimate stands at $1.03. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Willis Towers carries a Zacks Rank #3. Though the company has a favorable Zacks Rank, its negative ESP complicates surprise prediction.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Currently, the stock is trading at $122.97. We expect the earnings release to lead to stock movement.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Parkway, Inc. , which is expected to report third-quarter earnings on Nov 7, has an Earnings ESP of +28.89% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ares Management, L.P. (ARES - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #3. The company is set to report third-quarter earnings on Nov 7.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +2.82% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 8.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>