On Friday, Keefe, Bruyette & Woods adjusted their outlook on Marsh & McLennan (NYSE:MMC), increasing the price target to $195 from the previous $188, while maintaining an Underperform rating on the stock. This revision follows Marsh & McLennan's first-quarter earnings report and subsequent conference call.
The firm's decision to modify the price target was influenced by Marsh & McLennan's performance in the first quarter of 2024, which exceeded expectations. As a result, the firm's estimates for operating earnings per share (EPS) for the years 2024 and 2025 have been revised upwards to $8.75 and $9.45 respectively, from the initial $8.55 and $9.40. Additionally, the forecast for operating cash EPS has been updated to $9.30 for 2024 and $10.00 for 2025, up from $9.06 and $9.93.
The revised estimates also assume an increase in organic growth and a reduction in corporate losses. However, this is tempered by a projection of lower margins in 2025.
Despite the robust performance in the first quarter, Keefe, Bruyette & Woods anticipates that the slowing pace of primary property and casualty (P&C) rate increases could dampen investor sentiment towards brokerage firms like Marsh & McLennan. This outlook underpins the rationale for maintaining the Underperform rating despite the improved price target.
InvestingPro Insights
Marsh & McLennan's (NYSE:MMC) recent performance has garnered attention, with a notable increase in their price target from Keefe, Bruyette & Woods. To add further context, InvestingPro data shows that Marsh & McLennan has a market capitalization of $99.45 billion and trades at a Price/Earnings (P/E) ratio of 25.09, reflecting market expectations of the company's future financial performance. Additionally, the company has experienced a revenue growth of 10.38% over the last twelve months as of Q1 2024, indicating a strong upward trajectory in earnings.
InvestingPro tips highlight that Marsh & McLennan has raised its dividend for 14 consecutive years and has maintained dividend payments for 54 consecutive years, showcasing its commitment to shareholder returns. Moreover, the company is trading near its 52-week high and is recognized as a prominent player in the Insurance industry. For investors seeking more in-depth analysis and additional insights, there are 9 more InvestingPro Tips available for Marsh & McLennan at https://www.investing.com/pro/MMC. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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