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Marsh & Mclennan Companies (MMC)
NYSE:MMC
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Marsh & Mclennan Companies
(NYSE:MMC)
Rating:73Outperform
Price Target:
$254.00
▲( 10.91% Upside)
Positive Factors
Operational performance
Marsh McLennan reports 1Q25 operational earnings per share that exceeded both the analyst estimate and street consensus.
Technological advancements
MMC could benefit from industry-wide technological changes, allowing it to perform underwriting functions at incremental cost of insurance carriers and less sophisticated peer brokers.
Negative Factors
Growth slowdown
There is a slowdown in organic growth from previous quarters, attributed to heightened economic uncertainty.
Margin challenges
Headwinds from lower fiduciary interest income in Risk/Insurance are expected to increase, making margin expansion more challenging in a potentially weakening macro environment.
Marsh & Mclennan Companies (MMC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$113.73B
Dividend Yield1.41%
Average Volume (3M)2.27M
Price to Earnings (P/E)28.3
Beta (1Y)0.38
Revenue Growth7.56%
EPS Growth3.39%
CountryUS
Employees90,000
SectorFinancial
Sector Strength82
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)3.06
Shares Outstanding492,727,750
10 Day Avg. Volume1,948,244
30 Day Avg. Volume2,273,385
Financial Highlights & Ratios
PEG Ratio-57.03
Price to Book (P/B)7.94
Price to Sales (P/S)0.00
P/FCF Ratio26.76
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue1.37
Enterprise Value/Gross Profit12.43
Enterprise Value/Ebitda4.71
Forecast
1Y Price Target
$240.75Price Target Upside5.13% Upside
Rating ConsensusHold
Number of Analyst Covering13
Marsh & Mclennan Companies Business Overview & Revenue Model
Company DescriptionMarsh & McLennan Companies, Inc., a professional services company, provides advice and solutions to clients in the areas of risk, strategy, and people worldwide. It operates in two segments, Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment offers risk management services, such as risk advice, risk transfer, and risk control and mitigation solutions, as well as insurance and reinsurance broking, catastrophe and financial modeling, and related advisory services; and insurance program management services. This segment serves businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Consulting segment provides health, wealth, and career consulting services and products; and specialized management, as well as economic and brand consulting services. Marsh & McLennan Companies, Inc. was founded in 1871 and is headquartered in New York, New York.
How the Company Makes MoneyMarsh & McLennan Companies generate revenue through a diversified business model encompassing risk management, consulting, and insurance services. The primary revenue streams include insurance brokerage commissions and fees through Marsh, consultancy fees from Mercer, reinsurance brokerage and advisory fees from Guy Carpenter, and management consulting fees from Oliver Wyman. The company's earnings are bolstered by significant partnerships with insurance carriers, global corporations, and governmental bodies, which rely on MMC's expertise to manage risk, optimize strategies, and improve organizational performance. Additionally, MMC benefits from a broad geographic presence, enabling it to capture revenue from various markets around the world.
Marsh & Mclennan Companies Key Performance Indicators (KPIs)
Any
Risk and Insurance Revenue Breakdown
Details revenue from risk and insurance services, providing a view into the company's performance in managing and mitigating client risks, a core aspect of its business.
Details revenue from risk and insurance services, providing a view into the company's performance in managing and mitigating client risks, a core aspect of its business.
Data provided by:
Main Street Data
Main Street DataMarsh & Mclennan Companies Financial Statement Overview
Summary
Marsh & McLennan Companies demonstrate strong financial health with consistent revenue growth, robust profitability margins, and effective cash flow management. Despite a higher debt-to-equity ratio typical for the industry, the company effectively utilizes equity to generate returns. The overall financial performance is commendable, with potential leverage risks being a key area to monitor.Income Statement
The company has shown a consistent revenue growth trajectory with a TTM revenue increase of 2.41% compared to the previous year. The gross profit margin stands strong at 58.0% for TTM, reflecting efficient cost management. Net profit margin is also healthy at 16.1%, indicating solid profitability. The EBIT and EBITDA margins of 24.1% and 28.3% respectively demonstrate robust operational efficiency.85
Very Positive
Balance Sheet
The debt-to-equity ratio is relatively high at 1.59, which could imply potential leverage risks, though common in the industry. However, the company maintains a decent return on equity of 28.7%, signifying effective use of equity to generate profits. The equity ratio of 24.7% indicates a moderate level of equity financing.74
Positive
Cash Flow
There is a notable free cash flow growth of 4.79% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is strong at 1.10, suggesting efficient cash flow management relative to net income. Furthermore, the free cash flow to net income ratio of 1.03 is satisfactory, highlighting sound cash conversion.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 25.05B | 24.46B | 22.74B | 20.72B | 19.82B | 17.22B | Gross Profit |
| 10.67B | 10.46B | 9.64B | 8.65B | 8.39B | 7.09B | EBIT |
| 6.04B | 5.82B | 5.28B | 4.28B | 4.31B | 3.07B | EBITDA |
| 7.08B | 6.87B | 6.32B | 5.69B | 5.50B | 4.06B | Net Income Common Stockholders |
| 4.04B | 4.06B | 3.76B | 3.05B | 3.14B | 2.02B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.60B | 2.40B | 3.36B | 1.44B | 1.75B | 2.09B | Total Assets |
| 57.02B | 56.48B | 48.03B | 33.45B | 34.39B | 33.03B | Total Debt |
| 22.42B | 21.86B | 15.44B | 13.47B | 13.16B | 13.58B | Net Debt |
| 20.82B | 19.46B | 12.08B | 12.03B | 11.41B | 11.49B | Total Liabilities |
| 42.75B | 42.95B | 35.66B | 22.70B | 23.17B | 23.77B | Stockholders Equity |
| 14.06B | 13.34B | 12.19B | 10.75B | 11.22B | 9.26B |
| Cash Flow | Free Cash Flow | ||||
| 4.18B | 3.99B | 3.84B | 3.00B | 3.11B | 3.03B | Operating Cash Flow |
| 4.46B | 4.30B | 4.26B | 3.46B | 3.52B | 3.38B | Investing Cash Flow |
| -8.43B | -8.82B | -1.42B | -850.00M | -1.16B | -814.00M | Financing Cash Flow |
| 4.18B | 4.46B | -1.12B | -1.05B | -1.30B | -925.00M |
Marsh & Mclennan Companies Technical Analysis
Positive
229.01
Price Trends
229.37
Negative
226.01
Positive
223.70
Positive
Market Momentum
0.52
Negative
51.62
Neutral
73.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MMC, the sentiment is Positive. The current price of 229.01 is above the 20-day moving average (MA) of 226.35, below the 50-day MA of 229.37, and above the 200-day MA of 223.70, indicating a neutral trend. The MACD of 0.52 indicates Negative momentum. The RSI at 51.62 is Neutral, neither overbought nor oversold. The STOCH value of 73.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MMC.
Marsh & Mclennan Companies Risk Analysis
Marsh & Mclennan Companies disclosed 33 risk factors in its most recent earnings report. Marsh & Mclennan Companies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Our businesses are subject to a number of risks related to the U.S. healthcare industry, including risks related to healthcare regulation and reputational damage from negative publicity. Q4, 2024
Marsh & Mclennan Companies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $87.61B | 42.07 | 57.90% | 0.72% | 15.95% | 26.38% | |
74 Outperform | $87.16B | 52.35 | 9.27% | 0.72% | 14.07% | 31.44% | |
73 Outperform | $113.73B | 28.31 | 30.51% | 1.41% | 7.56% | 3.39% | |
69 Neutral | $78.26B | 30.88 | 74.17% | 0.75% | 19.57% | -8.09% | |
65 Neutral | $155.83B | 13.06 | 9.18% | 1.71% | 13.21% | -12.06% | |
65 Neutral | $31.01B | ― | -0.60% | 1.14% | 2.42% | -103.64% | |
64 Neutral | $12.78B | 9.87 | 7.67% | 17015.06% | 12.34% | -5.99% |
* Financial Sector Average
Performance Comparison
MMC
Marsh & Mclennan Companies
228.47
23.48
11.45%
AON
Aon
358.06
80.35
28.93%
AJG
Arthur J Gallagher & Co
335.48
86.60
34.80%
MUFG
Mitsubishi UFJ
13.66
3.99
41.26%
MCO
Moody's
471.76
67.75
16.77%
WTW
Willis Towers Watson
308.07
58.55
23.47%
Marsh & Mclennan Companies Earnings Call Summary
Earnings Call Date:Apr 17, 2025
(Q1-2025)
| % Change Since: -1.00%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with positive revenue growth and successful acquisition integration offset by challenges from declining property rates and macroeconomic uncertainties. The company's solid growth and strategic acquisitions are tempered by cautious outlooks due to economic volatility.Q1-2025 Updates
Positive Updates
Solid Revenue Growth
Marsh McLennan reported a 9% increase in consolidated revenue in the first quarter to $7.1 billion, with underlying growth of 4%.
Adjusted Operating Income and EPS Growth
Adjusted operating income increased by 8% to $2.2 billion, and adjusted EPS grew by 5% to $3.06.
Successful McGriff Acquisition
The McGriff acquisition integration is on track, contributing positively to the company's performance and expected to be accretive to adjusted EPS for full year 2025.
Strong Performance in Latin America
Latin America recorded 8% growth, supported by strong new business in the region.
Record Cat Bond Issuance
Guy Carpenter achieved a record quarter for cat bond issuance, placing eight discrete bonds totaling $1.8 billion in limit.
Negative Updates
Decline in Global Property Rates
Global property rates decreased by 6% year-over-year, following a 3% decline in the previous quarter.
Impact of Lower Interest Rates
Fiduciary income decreased to $103 million, down $19 million from the first quarter of the previous year, due to lower interest rates.
Uncertainty in Global Economic Outlook
The economic outlook remains uncertain due to ongoing trade negotiations, reduced consumer and business confidence, and financial market volatility.
Seasonality Impact on McGriff
McGriff's seasonality resulted in a modest dilution to adjusted EPS in the quarter.
Company Guidance
During Marsh McLennan's first quarter 2025 earnings call, the company reported a 9% growth in revenue, with underlying revenue increasing by 4%, despite challenges such as lower fiduciary interest income and a tough comparison to a strong Q1 in the previous year. Adjusted operating income rose by 8%, though the adjusted operating margin declined by 20 basis points due to seasonality at McGriff. Adjusted EPS grew by 5%, reaching $3.06. The company highlighted ongoing trade negotiations and macroeconomic uncertainties impacting consumer and business confidence, with potential inflationary effects on the cost of risk in the insurance industry. Marsh McLennan expects mid-single-digit underlying revenue growth, margin expansion, and solid adjusted EPS growth for the full year, while navigating market volatility and leveraging its expertise to support clients through challenges.Marsh & Mclennan Companies Corporate Events
Executive/Board ChangesShareholder Meetings
Marsh & McLennan’s Annual Meeting Decisions Announced
Neutral
May 19, 2025
On May 15, 2025, Marsh & McLennan Companies held its Annual Meeting of Stockholders, where key decisions were made. The stockholders elected eleven directors for a one-year term, approved executive compensation, ratified Deloitte & Touche LLP as the independent auditor, and approved amendments to the 2020 Incentive and Stock Award Plan. These decisions reflect the company’s ongoing governance practices and commitment to aligning executive incentives with shareholder interests.
The most recent analyst rating on (MMC) stock is a Hold with a $220.00 price target. To see the full list of analyst forecasts on Marsh & Mclennan Companies stock, see the MMC Stock Forecast page.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.