Marsh & Mclennan Companies (MMC) AI Stock Analysis

• Market Cap: $115.01B
• Dividend Yield: 1.43%
• Average Volume (3M): 2.33M
• Price to Earnings (P/E): 28.5
• Beta (1Y): 0.36
• Revenue Growth: 7.56%
• EPS Growth: 3.39%
• Country: US
• Employees: 90,000
• Sector: Financial
• Sector Strength: 88
• Industry: Insurance - Brokers
• EPS (TTM): 1.87
• Shares Outstanding: 492,903,100
• 10 Day Avg. Volume: 3,059,803
• 30 Day Avg. Volume: 2,334,936
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.66
• Price to Cash Flow (P/CF): 14.60
• P/FCF Ratio: 14.60
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 11.95
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $240.75
• Price Target Upside: 5.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

Marsh & McLennan Companies (MMC) scores a 73, driven by strong financial performance with consistent revenue growth and effective cash management. Technical analysis indicates a neutral trend, though valuation reflects a premium price. The earnings call highlighted the company's strategic positioning and challenges, with a cautious outlook due to economic uncertainties. Investors should monitor leverage risks and macroeconomic conditions impacting the insurance industry.

Positive Factors

Earnings

Marsh McLennan reports 1Q25 operational earnings per share that exceeded both the analyst estimate and street consensus.

Financial performance

Free cash flow margin forecast moves higher primarily on lower CapEx, with 1Q free cash flows beating estimates and working capital improving significantly.

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 outlook

Organic growth and margin outlooks in Risk/Insurance and Consulting are softer, with lower growth and pricing trends at Marsh and Guy Carpenter.

Margin pressure

Headwinds from lower year-over-year fiduciary interest income in RIS are set to increase, making underlying margins more difficult to expand in a potentially weakening macro environment.

Valuation concerns

The price objective reduces to $238 from a prior $264 due to multiple contraction, reflecting concerns over future growth.

Marsh & Mclennan Companies Business Overview & Revenue Model

Company Description

Marsh & 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 Money

Marsh & 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 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.

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.

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
24.46B	22.74B	20.72B	19.82B	17.22B
	Gross Profit
10.46B	9.64B	8.65B	8.39B	7.09B
	EBIT
5.82B	5.28B	4.28B	4.31B	3.07B
	EBITDA
6.87B	6.32B	5.69B	5.50B	4.06B
	Net Income Common Stockholders
4.06B	3.76B	3.05B	3.14B	2.02B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.40B	3.36B	1.44B	1.75B	2.09B
	Total Assets
56.48B	48.03B	33.45B	34.39B	33.03B
	Total Debt
21.86B	15.44B	13.47B	13.16B	13.58B
	Net Debt
19.46B	12.08B	12.03B	11.41B	11.49B
	Total Liabilities
42.95B	35.66B	22.70B	23.17B	23.77B
	Stockholders Equity
13.34B	12.19B	10.75B	11.22B	9.26B
Cash Flow		Free Cash Flow
3.99B	3.84B	3.00B	3.11B	3.03B
	Operating Cash Flow
4.30B	4.26B	3.46B	3.52B	3.38B
	Investing Cash Flow
-8.82B	-1.42B	-850.00M	-1.16B	-814.00M
	Financing Cash Flow
4.46B	-1.12B	-1.05B	-1.30B	-925.00M

Marsh & Mclennan Companies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 227.29
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 227.29 is above the 20-day moving average (MA) of 224.77, below the 50-day MA of 231.11, and above the 200-day MA of 222.93, indicating a neutral trend. The MACD of -2.43 indicates Negative momentum. The RSI at 50.83 is Neutral, neither overbought nor oversold. The STOCH value of 93.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MMC.

Marsh & Mclennan Companies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MCO	75 Outperform	$78.73B	38.85	57.90%	0.75%	15.95%	26.38%
AJG	74 Outperform	$84.67B	50.93	9.27%	0.74%	15.21%	46.99%
MMC	73 Outperform	$115.01B	28.51	30.51%	1.43%	7.56%	3.39%
AON	69 Neutral	$76.93B	30.36	74.17%	0.76%	19.57%	-8.09%
MUFG	65 Neutral	$135.57B	11.23	9.70%	1.92%	13.21%	-12.06%
WTW	65 Neutral	$30.94B	―	-0.60%	1.14%	2.42%	-103.64%
Sector *	64 Neutral	$12.64B	9.74	8.05%	17044.60%	12.66%	-4.62%

Marsh & Mclennan Companies Corporate Events

Marsh & McLennan Expands with McGriff Acquisition

Marsh McLennan, a global leader in risk and strategy, has successfully acquired McGriff Insurance Services, enhancing its capabilities in the middle market. This acquisition, valued at $7.75 billion, brings over 3,500 McGriff employees under Marsh McLennan Agency, promising expanded resources and innovative solutions for clients. This move is set to strengthen Marsh McLennan’s value proposition and deliver superior client services across the U.S.