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On Tuesday, UBS analyst Brian Meredith (NYSE:MDP) upgraded shares of Willis Towers Watson (NASDAQ:WTW) from Neutral to Buy, increasing the price target to $395 from the previous $344. The upgrade reflects Meredith’s expectation of the company’s improved operating and free cash flow (FCF) margins outpacing those of its peers in the insurance brokerage industry. According to InvestingPro data, WTW, currently valued at $32.7 billion, trades near its Fair Value, with analyst targets ranging from $302 to $408.
Willis Towers Watson’s stock has seen a relatively modest year-to-date (YTD) increase of 4.8% compared to a 13% average gain among its peers. This performance follows the company’s 2025 guidance, which led to a reduction in estimates for the years 2025 and 2026. Meredith believes that the market has already accounted for these adjustments in the current stock price. InvestingPro data reveals the company has maintained dividend payments for 23 consecutive years, with a current yield of 1.12%, demonstrating consistent shareholder returns despite market fluctuations.
The UBS analyst anticipates that Willis Towers Watson will sustain an organic revenue growth rate of 5.9% in 2025, which is higher than the consensus estimate of 5.2%. This growth is expected to be on par with or better than that of competitors as the company shifts its business mix towards faster-growing industries and products.
Meredith also suggests there could be potential upside to earnings per share (EPS) as Willis Towers Watson strategically utilizes excess capital for mergers and acquisitions, alongside maintaining a robust share buyback program. The analyst’s comments indicate a positive outlook for the company’s financial performance relative to its industry group.
In other recent news, Willis Lease Finance Corporation reported record fourth-quarter earnings, with revenue rising by 33.7% year-over-year to $152.8 million. The company’s diluted earnings per share increased to $2.81, up from $1.53 in the same period last year. For the full year 2024, Willis Lease Finance achieved total revenues of $569.2 million and pre-tax income of $152.6 million, driven by strong lease rent and maintenance reserve revenues. CEO Austin C. Willis highlighted the company’s successful deployment of nearly $1 billion in high-demand engines and aircraft. The company’s lease portfolio expanded to $2.87 billion as of December 31, 2024. Meanwhile, WTW has announced the appointment of Massimo Cavadini to lead its European analytics division. This move is part of WTW’s strategy to enhance its insurance analytics capabilities using data and artificial intelligence. Cavadini’s role will focus on scaling consulting and software solutions in the areas of claims processing and underwriting.
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