Willis Towers Watson(US:WTW) ZACKS·2025-12-10 16:31Core Insights - Shares of Willis Towers Watson Public Limited Company (WTW) have increased by 4.8% over the past year, outperforming the industry's decline of 27.4% [1] - The company has a market capitalization of $31.43 billion, with an average trading volume of 0.6 million shares over the last three months [1] Financial Performance - WTW's earnings have surpassed estimates in three of the last four quarters, with an average beat of 2.39% [2] - The shares are currently trading above the 200-day moving average, indicating a bearish trend [2] Valuation Metrics - WTW shares are trading at a forward price-to-earnings multiple of 17.49X, which is lower than the industry average of 21.4X, the Finance sector's 17.07X, and the Zacks S&P 500 Composite's 23.46X [3] Growth Projections - The Zacks Consensus Estimate projects a 13.9% increase in earnings per share and a 4.8% increase in revenues for 2026 compared to 2025 [9] - The average price target from 19 analysts is $366.68 per share, suggesting a potential upside of 14.4% from the last closing price [10] Analyst Sentiment - Recent analyst activity shows one analyst has raised estimates for 2025, and two have raised estimates for 2026 in the past 30 days [12] - The consensus estimate for 2025 earnings has increased by 0.2%, while the estimate for 2026 has risen by 0.3% [12] Strategic Focus - WTW aims to improve operating margins, increase free cash flow, and drive sustainable revenue growth, particularly in Risk and Broking and Individual Marketplace [13] - The company has experienced revenue growth for 15 consecutive quarters, supported by strategic acquisitions and geographic diversification [16] Capital Management - WTW has been enhancing its liquidity and maintaining a solid balance sheet, which supports capital deployment for buybacks, dividends, and acquisitions [17] - The company plans to allocate approximately $1.5 billion for share repurchases in 2025, with a six-year CAGR of 5.7% for dividends from 2019 to 2025 [18] Challenges - Rising expenses, including higher salaries, operating costs, and consulting fees, have led to margin contraction [19] - WTW's trailing 12-month return on equity (ROE) is 21.4%, below the industry average of 23.3%, indicating inefficiency in utilizing shareholders' funds [20] Overall Assessment - WTW has a strong product portfolio and a solid track record of strategic acquisitions, with favorable growth estimates in its Health, Wealth & Career, and Risk & Broking segments [21]