Marsh & McLennan Companies, Inc. (NYSE: MMC) had its price target modestly increased by Keefe, Bruyette & Woods from $209.00 to $212.00.
The firm has chosen to maintain its Underperform rating on the stock. This adjustment follows the company's third-quarter earnings report and subsequent conference call.
The analyst at Keefe, Bruyette & Woods adjusted the price target based on an updated evaluation of Marsh & McLennan's cash earnings per share (EPS) estimates for the coming years.
The new target is grounded on 22.0 times the revised 2025 cash EPS estimate and 20.3 times the updated 2026 cash EPS forecast.
Despite the recent third-quarter results surpassing expectations, the firm has revised its operating cash EPS projections downward for 2024, 2025, and 2026 to $8.85, $9.65, and $10.45, respectively, from the previous forecasts of $9.34, $10.05, and $10.81.
The revised estimates take into account a lower-than-anticipated Risk & Insurance Services (RIS) margin and an anticipated increase in interest expenses, which are somewhat balanced by higher Consulting margins. Additionally, the firm has updated its operating cash EPS calculation to exclude other net benefit credits that are non-cash, aligning with Marsh & McLennan's planned reporting changes.
In other recent news, Marsh & McLennan displayed strong performance in Q3 2024, reporting a 5% rise in underlying revenue and a 12% increase in adjusted operating income. The company also announced an adjusted EPS of $1.63, up 4% year-over-year, and a consolidated revenue of $5.7 billion.
In a significant expansion move, Marsh & McLennan acquired McGriff Insurance Services for $7.75 billion, a deal expected to close by the end of the year. The acquisition is anticipated to be modestly accretive to adjusted EPS in the first year. BMO Capital Markets increased its price target on Marsh & McLennan shares to $228.00 while maintaining a Market Perform rating.
RBC Capital also adjusted its price target to $242.00, maintaining a Sector Perform rating. On the other hand, Goldman Sachs maintained its Sell rating with a price target of $220.00.
InvestingPro Insights
Marsh & McLennan Companies, Inc. (NYSE:MMC) continues to demonstrate financial resilience despite the cautious outlook from analysts. According to InvestingPro data, the company boasts a market capitalization of $109.06 billion and a P/E ratio of 27.18, indicating investor confidence in its earnings potential.
InvestingPro Tips highlight MMC's strong dividend history, having raised its dividend for 15 consecutive years and maintained payments for 54 years. This consistency aligns with the company's stable financial position, even as analysts adjust their forecasts. The company's dividend yield stands at 1.47%, with a notable dividend growth of 14.79% over the last twelve months.
While Keefe, Bruyette & Woods maintains an Underperform rating, it's worth noting that MMC has shown a 20.05% price total return over the past year. The company's revenue growth of 7.84% and EBITDA growth of 15.71% in the last twelve months suggest ongoing operational improvements, which could potentially offset concerns about slowing P&C rate increases.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips on Marsh & McLennan, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.