Marsh & McLennan Prepares for Earnings Report Amid Cautious Analyst Sentiment
New York’s Marsh & McLennan Companies, Inc. (MMC) is gearing up to release its fiscal Q4 earnings on Thursday, January 23. The professional services firm, valued at a market cap of $103.8 billion, specializes in risk, strategy, and people through its Risk and Insurance Services and Consulting segments.
Analysts Predict Solid Earnings Growth
An earnings per share (EPS) of $1.86 is anticipated, a 10.7% increase from last year’s $1.68 for the same quarter. The company has shown strong performance, regularly exceeding Wall Street expectations in recent quarters. In the last cycle, MMC reported an adjusted EPS of $1.63 in Q3, surpassing estimates by 1.2%.
Future EPS Growth Expected
Looking forward, analysts forecast that MMC will achieve an EPS of $8.69 for fiscal 2024, reflecting an 8.8% increase from fiscal 2023’s $7.99. By fiscal 2025, EPS is projected to reach $9.40, demonstrating continued growth.
Stock Performance Falls Short of Market
Over the past year, shares of Marsh & McLennan have risen only 11.1%. This performance lags behind the S&P 500 Index’s increase of 23.7% and the Financial Select Sector SPDR Fund’s (XLF) return of 27.7% during the same period.
Mixed Q3 Earnings Impact Stock Sentiment
Following its mixed Q3 earnings release on October 17, shares of MMC experienced a slight decline. While adjusted earnings rose by 3.8% year-over-year to $1.63 per share, revenues of $5.7 billion increased by 5.9% but fell short of analysts’ expectations. Factors contributing to this shortfall included lower growth in the consulting segment and the Guy Carpenter unit, along with elevated expenses, which diminished the positive effects of the earnings increase.
Analyst Ratings Reflect Cautious Outlook
Currently, Wall Street analysts maintain an overall “Hold” rating for Marsh & McLennan. Among the 22 analysts following the stock, four suggest a “Strong Buy,” two recommend a “Moderate Buy,” while 14 rate it as a “Hold.” One analyst recommends a “Moderate Sell,” and another advises a “Strong Sell.”
Price Target Suggests Modest Upside
The average price target for MMC stands at $233.85, representing a potential upside of 10.7% from current trading levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
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