We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WTW Rises 24.7% in a Year but Lags Industry: How to Play the Stock
Read MoreHide Full Article
Shares of Willis Towers Watson Public Limited Company (WTW - Free Report) have gained 24.7% in the past year, outperforming the Finance sector and the Zacks S&P 500 composite’s growth of 17.4% and 9.3%, respectively. Shares of WTW have underperformed the industry’s growth of 26.5% in the same time frame.
The insurer has a market capitalization of $30.99 billion. The average volume of shares traded in the last three months was 0.6 million. WTW shares are trading below the 200-day moving average, indicating a bullish trend.
WTW vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
WTW Shares are Affordable
WTW shares are trading at a price to forward 12-months earnings of 17.75X, lower than the industry average of 22.63X. Its pricing, at a discount to the industry average, gives a better entry point to investors. Shares of other insurers like Brown & Brown, Inc. (BRO - Free Report) , Marsh & McLennan Companies, Inc. (MMC - Free Report) and Arthur J. Gallagher & Co. (AJG - Free Report) are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
WTW’s Growth Projection Encourages
The Zacks Consensus Estimate for Willis Towers’s 2026 earnings per share and revenues indicates an increase of 13.8% and 5.3%, respectively, from the corresponding 2025 estimates.
The insurer has a solid surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average beat being 5.12%.
Factors Impacting WTW
Willis Towers’ growth strategy encompasses a focus on improving operating margins, increasing free cash flow conversion and driving sustainable revenue growth. Focus on core opportunities with the highest growth and return, which include gaining market share in Risk and Broking and Individual Marketplace, should spur long-term growth and return more value to shareholders.
Well-performing Health, Wealth & Career and Risk & Broking segments, driven by solid customer retention levels, growing new business and geographic diversification, continue to fuel the top line. Most of the company's operating regions experienced revenue growth for 15 straight quarters.
Strategic acquisitions have expanded its geographical footprint in the last few years in countries like Italy, Canada, the United Kingdom and France, as well as ramped up its product portfolio.
Willis Towers has been improving its liquidity while maintaining a solid balance sheet. A solid balance sheet and steady cash flow are expected to help the company engage in capital deployment for buybacks, dividend payouts, debt repayments, acquisitions and investments that drive and support growth.
Distribution of Wealth
Banking on its capital position, WTW distributes wealth to shareholders in the form of dividend hikes and share repurchases. Its dividend has witnessed a six-year CAGR (2019-2025) of 5.7%. The insurer expects share repurchases to total approximately $1.5 billion in 2025, subject to market conditions and other relevant factors.
Headwinds
Despite the upside potential, Willis Towers’ expenses have been rising over the last several quarters. Higher salaries and benefits, other operating expenses, and transaction and transformation, as well as increased consulting and compensation costs related to the Transformation program, result in the contraction of margins. Willis Towers estimates to deliver expansion in margin over the long term.
WTW’s trailing 12-month ROE of 20.5% is weak when compared with the industry average of 27.3%, reflecting its inefficiency in using shareholders' funds.
Final Take on WTW
Willis Towers boasts a strong product portfolio and has a solid track record of strategic acquisitions, as well as favorable growth estimates. The Health, Wealth & Career and Risk & Broking segments should continue to witness significant growth from increases in most lines of business. A robust capital position over the years reflects its financial flexibility.
Image: Bigstock
WTW Rises 24.7% in a Year but Lags Industry: How to Play the Stock
Shares of Willis Towers Watson Public Limited Company (WTW - Free Report) have gained 24.7% in the past year, outperforming the Finance sector and the Zacks S&P 500 composite’s growth of 17.4% and 9.3%, respectively. Shares of WTW have underperformed the industry’s growth of 26.5% in the same time frame.
The insurer has a market capitalization of $30.99 billion. The average volume of shares traded in the last three months was 0.6 million.
WTW shares are trading below the 200-day moving average, indicating a bullish trend.
WTW vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
WTW Shares are Affordable
WTW shares are trading at a price to forward 12-months earnings of 17.75X, lower than the industry average of 22.63X. Its pricing, at a discount to the industry average, gives a better entry point to investors. Shares of other insurers like Brown & Brown, Inc. (BRO - Free Report) , Marsh & McLennan Companies, Inc. (MMC - Free Report) and Arthur J. Gallagher & Co. (AJG - Free Report) are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
WTW’s Growth Projection Encourages
The Zacks Consensus Estimate for Willis Towers’s 2026 earnings per share and revenues indicates an increase of 13.8% and 5.3%, respectively, from the corresponding 2025 estimates.
The insurer has a solid surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average beat being 5.12%.
Factors Impacting WTW
Willis Towers’ growth strategy encompasses a focus on improving operating margins, increasing free cash flow conversion and driving sustainable revenue growth. Focus on core opportunities with the highest growth and return, which include gaining market share in Risk and Broking and Individual Marketplace, should spur long-term growth and return more value to shareholders.
Well-performing Health, Wealth & Career and Risk & Broking segments, driven by solid customer retention levels, growing new business and geographic diversification, continue to fuel the top line. Most of the company's operating regions experienced revenue growth for 15 straight quarters.
Strategic acquisitions have expanded its geographical footprint in the last few years in countries like Italy, Canada, the United Kingdom and France, as well as ramped up its product portfolio.
Willis Towers has been improving its liquidity while maintaining a solid balance sheet. A solid balance sheet and steady cash flow are expected to help the company engage in capital deployment for buybacks, dividend payouts, debt repayments, acquisitions and investments that drive and support growth.
Distribution of Wealth
Banking on its capital position, WTW distributes wealth to shareholders in the form of dividend hikes and share repurchases. Its dividend has witnessed a six-year CAGR (2019-2025) of 5.7%. The insurer expects share repurchases to total approximately $1.5 billion in 2025, subject to market conditions and other relevant factors.
Headwinds
Despite the upside potential, Willis Towers’ expenses have been rising over the last several quarters. Higher salaries and benefits, other operating expenses, and transaction and transformation, as well as increased consulting and compensation costs related to the Transformation program, result in the contraction of margins. Willis Towers estimates to deliver expansion in margin over the long term.
WTW’s trailing 12-month ROE of 20.5% is weak when compared with the industry average of 27.3%, reflecting its inefficiency in using shareholders' funds.
Final Take on WTW
Willis Towers boasts a strong product portfolio and has a solid track record of strategic acquisitions, as well as favorable growth estimates. The Health, Wealth & Career and Risk & Broking segments should continue to witness significant growth from increases in most lines of business. A robust capital position over the years reflects its financial flexibility.
Given the escalating expenses and poor return on equity, it is better to stay cautious about this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.