Willis Towers Watson Public Limited Company’s WTW shares have rallied 38.8% in a year compared with the industry's growth of 17.1%. The Finance sector and the Zacks S&P 500 index have returned 26.5% and 24.8% in the said time frame, respectively. With a market capitalization of $29.25 billion, the average volume of shares traded in the last three months was 0.4 million.

WTW Outperforms Industry, Sector, S&P 500

Image Source: Zacks Investment Research

The rally was driven by new business, strategic acquisitions, geographic diversification, solid customer retention levels and a strong capital position, along with solid growth projections.

WTW Witnessing Northbound Estimate Revision

The Zacks Consensus Estimate for Willis Towers’ 2024 and 2025 earnings has moved 1.4% and 1.5% north, respectively, in the past 60 days, reflecting analyst optimism.

WTW’s Growth Projection Encourages

The Zacks Consensus Estimate for Willis Towers’ 2024 earnings per share indicates a year-over-year increase of 13.9%. The consensus estimate for revenues is pegged at $9.94 billion, implying a year-over-year improvement of 4.8%.
 
The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 12.4% and 5%, respectively, from the corresponding 2024 estimates. The long-term earnings growth rate is currently pegged at 11.7%.

Factors Acting in Favor of 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 U.K. and France, as well as ramped up its product portfolio.

This Zacks Rank #3 (Hold) company expects to deliver revenues of more than $9.9 billion. Based on the strong first-half performance, WTW has raised the low end of 2024 adjusted operating margin and adjusted EPS target to 23-23.5% and $16-$17, respectively. 

Solid operational performance ensures smooth cash flow. WTW continues to expect a year-over-year improvement in free cash flow margin in 2024