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Here's Why You Should Stay Invested in Willis Towers (WTW)
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Willis Towers Watson plc (WTW - Free Report) is poised for growth on segmental strength driving organic commissions and fees and solid customer retention levels. Growing new business, strategic buyouts, solid capital position and favorable growth estimates make Willis Towers stock worth retaining in one’s portfolio.
Willis Towers has a solid track record of beating earnings estimates in the last 10 quarters.
Zacks Rank & Price Performance
Willis Towers currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 0.8% compared with the industry’s increase of 1.4%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Willis Towers’ 2022 earnings is pegged at $13.63, indicating a 17.5% increase from the year-ago reported figure. The consensus estimate for 2023 earnings is pegged at $15.86, indicating an increase of 16.4% year over year.
Business Tailwinds
Strong customer retention levels and growing new business should continue to fuel revenue growth at Willis Towers. Most of the operating regions experienced revenue growth for 14 straight quarters. For 2022, WTW expects to deliver mid-single-digit organic revenue growth.
Willis Towers eyes strategic acquisitions that expand its geographical footprint, add capabilities and strengthen its portfolio.
WTW’s growth strategy focuses on core opportunities with the highest growth and returns, which include gaining market share in Risk and Broking and Individual Marketplace. The broker innovated and developed its offerings in markets and boosted its abilities in fast-growth markets like health insurance, cyber and climate.
While WTW stays focused on core opportunities to deliver the highest growth and return, it also looks for strategic inorganic expansion to drive growth.
Willis Towers has been improving its liquidity while maintaining a solid balance sheet.
Cost Savings Initiative
Willis Towers projects $300 million in cost reductions to contribute 300 basis points of improvement to the fiscal 2024 margin target by maximizing global platforms, right-shoring operations, rationalizing real estate and modernizing IT. The insurance broker thus plans a $750 million investment over a three-year period through 2024.
Effective Capital Deployment
Willis Towers has a decent dividend history of raising dividends at a five-year CAGR (2017-2021) of 11%. The board of directors approved a $4 billion share buyback program last September. WTW expects to complete an additional repurchase of $3 billion in 2022.
Willis Towers estimates to deploy $10-$11 billion in capital through 2024 to drive shareholder value with new investment and aims for industry-leading total shareholder return.
Upbeat 2024 Financial Targets
Willis Towers aims to deliver more than $10 billion by delivering growth in the mid-single-digit range, with reinvestment in differentiated solutions and scalable innovation and increasing market share, adjusted operating margin between 24% and 25% and adjusted earnings per share between $18 and $21. Free cash flow is estimated to be between $5 and $6 billion.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings indicates a respective year-over-year increase of 18.3% and 15%. United Fire Group delivered a four-quarter average earnings surprise of 275.45%.
The Zacks Consensus Estimate for CINF’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days. Cincinnati Financial delivered a four-quarter average earnings surprise of 38.48%.
The Zacks Consensus Estimate for FNF’s 2022 earnings has moved 3.3% north in the past seven days. Fidelity National delivered a four-quarter average earnings surprise of 31.73%.
Shares of UFCS and CINF have gained 32.4% and 18.6%, respectively year to date while that of FNF have lost 12.7% in the same time frame.
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Here's Why You Should Stay Invested in Willis Towers (WTW)
Willis Towers Watson plc (WTW - Free Report) is poised for growth on segmental strength driving organic commissions and fees and solid customer retention levels. Growing new business, strategic buyouts, solid capital position and favorable growth estimates make Willis Towers stock worth retaining in one’s portfolio.
Willis Towers has a solid track record of beating earnings estimates in the last 10 quarters.
Zacks Rank & Price Performance
Willis Towers currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 0.8% compared with the industry’s increase of 1.4%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Willis Towers’ 2022 earnings is pegged at $13.63, indicating a 17.5% increase from the year-ago reported figure. The consensus estimate for 2023 earnings is pegged at $15.86, indicating an increase of 16.4% year over year.
Business Tailwinds
Strong customer retention levels and growing new business should continue to fuel revenue growth at Willis Towers. Most of the operating regions experienced revenue growth for 14 straight quarters. For 2022, WTW expects to deliver mid-single-digit organic revenue growth.
Willis Towers eyes strategic acquisitions that expand its geographical footprint, add capabilities and strengthen its portfolio.
WTW’s growth strategy focuses on core opportunities with the highest growth and returns, which include gaining market share in Risk and Broking and Individual Marketplace. The broker innovated and developed its offerings in markets and boosted its abilities in fast-growth markets like health insurance, cyber and climate.
While WTW stays focused on core opportunities to deliver the highest growth and return, it also looks for strategic inorganic expansion to drive growth.
Willis Towers has been improving its liquidity while maintaining a solid balance sheet.
Cost Savings Initiative
Willis Towers projects $300 million in cost reductions to contribute 300 basis points of improvement to the fiscal 2024 margin target by maximizing global platforms, right-shoring operations, rationalizing real estate and modernizing IT. The insurance broker thus plans a $750 million investment over a three-year period through 2024.
Effective Capital Deployment
Willis Towers has a decent dividend history of raising dividends at a five-year CAGR (2017-2021) of 11%. The board of directors approved a $4 billion share buyback program last September. WTW expects to complete an additional repurchase of $3 billion in 2022.
Willis Towers estimates to deploy $10-$11 billion in capital through 2024 to drive shareholder value with new investment and aims for industry-leading total shareholder return.
Upbeat 2024 Financial Targets
Willis Towers aims to deliver more than $10 billion by delivering growth in the mid-single-digit range, with reinvestment in differentiated solutions and scalable innovation and increasing market share, adjusted operating margin between 24% and 25% and adjusted earnings per share between $18 and $21. Free cash flow is estimated to be between $5 and $6 billion.
Stocks to Consider
Some better-ranked stocks from the insurance industry are United Fire Group (UFCS - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and Fidelity National Financial (FNF - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings indicates a respective year-over-year increase of 18.3% and 15%. United Fire Group delivered a four-quarter average earnings surprise of 275.45%.
The Zacks Consensus Estimate for CINF’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days. Cincinnati Financial delivered a four-quarter average earnings surprise of 38.48%.
The Zacks Consensus Estimate for FNF’s 2022 earnings has moved 3.3% north in the past seven days. Fidelity National delivered a four-quarter average earnings surprise of 31.73%.
Shares of UFCS and CINF have gained 32.4% and 18.6%, respectively year to date while that of FNF have lost 12.7% in the same time frame.