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Here's Why Should You Stay Invested in Willis Towers (WTW)
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Willis Towers Watson plc (WTW - Free Report) is well-poised for growth on increasing organic commissions and fees, customer retention levels, new business, strategic buyouts, solid capital position and favorable growth estimates. These factors cumulatively make Willis Towers stock worth retaining in one’s portfolio.
Willis Towers has a solid track record of beating earnings estimates in the last 13 quarters.
Zacks Rank & Price Performance
Willis Towers currently carries a Zacks Rank #3 (Hold). In a month, the stock has gained 4.9% compared with the industry’s increase of 4.8%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Willis Towers’ 2022 earnings is pegged at $13.60, indicating a 17.2% increase from the year-ago reported figure. The consensus mark for 2023 earnings stands at $15.53, suggesting growth of 14.2% year over year.
The expected long-term earnings growth is pegged at 16.5%, better than the industry average of 11.6%.
Growth Drivers
Willis Towers’ top line should continue to benefit from solid customer retention levels and growing new business. For 2022, WTW expects to deliver mid-single-digit organic revenue growth.
The insurance broker’s growth strategy encompasses a focus on core opportunities with the highest growth and returns as well as seeking strategic inorganic expansion that expands its geographical footprint, adds capabilities and strengthens its portfolio.
Willis Towers targets more than $10 billion by delivering growth in the mid-single-digit range by 2024, with reinvestment in differentiated solutions and scalable innovation and increasing market share.
Willis Towers estimates $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. Thus, the insurance broker estimates a $750 million investment over three years through 2024 to realize the benefits.
WTW thus expects an adjusted operating margin between 24% and 25% and adjusted earnings per share between $18 and $21 by 2024.
Willis Towers remains focused on improving liquidity while maintaining a solid balance sheet, which, in turn, helps it effectively deploy capital to enhance shareholders’ value. WTW has raised dividends at a nine-year CAGR (2014-2022) of 11.8%. 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. In May 2022, WTW increased the existing share repurchase authority to $1 billion, which is in addition to the approximately $1.3 billion remaining on the current open-ended repurchase authority.
Willis Towers expects to deploy $10-$11 billion in capital through 2024 to drive shareholder value with new investment and aims for industry-leading total shareholder return. Free cash flow is estimated between $5 billion and $6 billion.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed once, the average being 33.64%. In the past year, the insurer has rallied 12.8%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 2.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 3.1% and 3.3% north, respectively, in the past 30 days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed once, the average being 150.9%. In the past year, the insurer has lost 11.7%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 30 days.
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Here's Why Should You Stay Invested in Willis Towers (WTW)
Willis Towers Watson plc (WTW - Free Report) is well-poised for growth on increasing organic commissions and fees, customer retention levels, new business, strategic buyouts, solid capital position and favorable growth estimates. These factors cumulatively make Willis Towers stock worth retaining in one’s portfolio.
Willis Towers has a solid track record of beating earnings estimates in the last 13 quarters.
Zacks Rank & Price Performance
Willis Towers currently carries a Zacks Rank #3 (Hold). In a month, the stock has gained 4.9% compared with the industry’s increase of 4.8%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Willis Towers’ 2022 earnings is pegged at $13.60, indicating a 17.2% increase from the year-ago reported figure. The consensus mark for 2023 earnings stands at $15.53, suggesting growth of 14.2% year over year.
The expected long-term earnings growth is pegged at 16.5%, better than the industry average of 11.6%.
Growth Drivers
Willis Towers’ top line should continue to benefit from solid customer retention levels and growing new business. For 2022, WTW expects to deliver mid-single-digit organic revenue growth.
The insurance broker’s growth strategy encompasses a focus on core opportunities with the highest growth and returns as well as seeking strategic inorganic expansion that expands its geographical footprint, adds capabilities and strengthens its portfolio.
Willis Towers targets more than $10 billion by delivering growth in the mid-single-digit range by 2024, with reinvestment in differentiated solutions and scalable innovation and increasing market share.
Willis Towers estimates $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. Thus, the insurance broker estimates a $750 million investment over three years through 2024 to realize the benefits.
WTW thus expects an adjusted operating margin between 24% and 25% and adjusted earnings per share between $18 and $21 by 2024.
Willis Towers remains focused on improving liquidity while maintaining a solid balance sheet, which, in turn, helps it effectively deploy capital to enhance shareholders’ value. WTW has raised dividends at a nine-year CAGR (2014-2022) of 11.8%. 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. In May 2022, WTW increased the existing share repurchase authority to $1 billion, which is in addition to the approximately $1.3 billion remaining on the current open-ended repurchase authority.
Willis Towers expects to deploy $10-$11 billion in capital through 2024 to drive shareholder value with new investment and aims for industry-leading total shareholder return. Free cash flow is estimated between $5 billion and $6 billion.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , American Financial Group, Inc. (AFG - Free Report) and ProAssurance Corporation (PRA - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed once, the average being 33.64%. In the past year, the insurer has rallied 12.8%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 2.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 3.1% and 3.3% north, respectively, in the past 30 days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed once, the average being 150.9%. In the past year, the insurer has lost 11.7%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 30 days.