Willis Towers Watson’s Strong Performance Signals Investor Confidence
Willis Towers Watson Public Limited Company (WTW), based in London, is a prominent global advisory and broking firm. The company specializes in risk management, benefits optimization, and capability expansion for businesses worldwide. With a market capitalization of $32.3 billion, WTW operates in various segments, including Risk & Broking and Health, Wealth & Career.
WTW Outperforms in 2024 Despite Previous Struggles
While WTW’s stock has lagged behind the broader market over the past year, it has shown strong growth in 2024. Year-to-date, WTW’s stock has increased by 33%, outpacing the S&P 500 Index’s 25.8% gain this year. However, it still underperforms compared to the Financial Select Sector SPDR Fund (XLF), which achieved 36.3% gains in 2024.
Impressive Q3 Earnings Drive Stock Price Upward
WTW saw its stock price rise approximately 3% following the release of its promising Q3 earnings on October 31. The company reported a 5.7% year-over-year increase in total revenues, reaching $2.3 billion, surpassing analysts’ estimates. This growth was largely fueled by a 9.9% rise in the Risk & Broking segment, which delivered $940 million in revenues. Additionally, WTW reported a 14.1% year-over-year growth in free cash flow, amounting to $807 million, reflecting its commitment to improving cash flow.
Adjusted earnings per share (EPS) increased significantly, up 30.8% year-over-year to $2.93, exceeding analyst expectations by 9.3%. The company is optimistic about maintaining this momentum into Q4 and meeting its annual targets.
Analysts Remain Bullish Despite Slight Changes in Recommendations
For the current fiscal year, which ends in December, analysts predict a 15.3% growth in adjusted EPS, targeting $16.70. WTW has a strong history of exceeding earnings estimates, having done so for four consecutive quarters. Currently, WTW stock has a consensus “Moderate Buy” rating, with 21 analysts covering it—nine recommending “Strong Buy,” two suggesting “Moderate Buy,” nine advising “Hold,” and one indicating a “Strong Sell.”
This sentiment is a slight decrease from three months ago, when no analysts recommended a “Strong Sell.” On November 5, KBW analyst Meyer Shields reiterated a “Buy” rating and raised the price target to $359, suggesting an upside potential of 11.9% from current levels.
The average price target for WTW stands at $334.84, indicating a modest 4.4% premium. The highest target from analysts is $369, suggesting a significant upside potential of 15%.
On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information in this article is provided for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
The views expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
