Willis Towers Watson (WTW) AI Stock Analysis

• Market Cap: $30.49B
• Dividend Yield: 1.15%
• Average Volume (3M): 805.39K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.29
• Revenue Growth: 2.42%
• EPS Growth: -103.64%
• Country: US
• Employees: 49,000
• Sector: Financial
• Sector Strength: 88
• Industry: Insurance - Brokers
• EPS (TTM): 3.13
• Shares Outstanding: 99,149,790
• 10 Day Avg. Volume: 838,626
• 30 Day Avg. Volume: 805,388
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.27
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 8.73
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $356.75
• Price Target Upside: 15.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Willis Towers Watson's overall stock score is 65, reflecting strengths in organic growth and strategic execution, along with robust gross margins and free cash flow generation. However, challenges such as negative net income, valuation concerns, and geopolitical risks create a balanced yet cautious outlook.

Positive Factors

Investment Opportunity

WTW is seen as an attractive investment opportunity because its shares are currently undervalued compared to its peers, providing an entry point for investors.

Operational Performance

The adjusted operating income margin of 21.6% exceeded consensus expectations, indicating strong operational performance.

Strategic Expansion

WTW is exploring expansion opportunities in the mid-market segment to enhance its business mix and improve its presence in the insurance value chain.

Negative Factors

Earnings Performance

WTW reports 1Q25 operating EPS of $3.13, which is a miss compared to estimates.

Financial Performance

Free cash flow was negative $87 million and missed the consensus of positive $39 million.

Revenue Challenges

Revenue was slightly below consensus in both HWC and R&B segments, reflecting challenges in meeting sales expectations.

Willis Towers Watson Business Overview & Revenue Model

Company Description

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. It operates through two segments, Health, Wealth and Career; and Risk and Broking. The company offers actuarial support, plan design, and administrative services for traditional pension and retirement savings plans; plan management consulting, broking, and administration services for health and group benefit programs; and benefits outsourcing services. It also provides advice, data, software, and products to address clients' total rewards and talent issues. In addition, the company offers risk advice, insurance brokerage, and consulting services in the areas of property and casualty, aerospace, construction, and marine. Further, it offers investment consulting and discretionary management services to insurance and reinsurance companies; insurance consulting and technology, risk and capital management, pricing and predictive modeling, financial and regulatory reporting, financial and capital modeling, merger and acquisition, outsourcing, and business management services; wholesale insurance broking services to retail and wholesale brokers; and underwriting and capital management, capital market, and advisory and brokerage services. Additionally, the company provides primary medical and ancillary benefit exchange, and outsourcing services to active employees and retirees in the group and individual markets, as well as delivers healthcare and reimbursement accounts, including health savings accounts, health reimbursement arrangements, flexible spending accounts, and other consumer-directed accounts. The company was formerly known as Willis Group Holdings Public Limited Company and changed its name to Willis Towers Watson Public Limited Company in January 2016. Willis Towers Watson Public Limited Company was founded in 1828 and is based in London, the United Kingdom.

How the Company Makes Money

Willis Towers Watson generates revenue through a diversified business model that encompasses several key streams. The company primarily earns money by providing consulting and advisory services in human capital and benefits, which include strategic human resource consulting, employee benefits brokerage, and administration services. Additionally, WTW's corporate risk and broking segment generates income through insurance brokerage services, where they act as an intermediary between clients and insurers to negotiate and place insurance coverage. In the investment, risk, and reinsurance segment, WTW earns revenue by offering investment consulting, risk management services, and reinsurance brokerage. The company also benefits from software sales and licensing fees from its proprietary software solutions designed to support risk management and human resource functions. Strategic partnerships and alliances with insurers, reinsurers, and other service providers further enhance WTW's ability to serve its clients and contribute to its revenue growth.

Willis Towers Watson Financial Statement Overview

Summary

Willis Towers Watson's financial performance is mixed. The company shows strong gross profit margins and free cash flow generation. However, there are challenges in revenue growth and profitability, with negative net income and declining stockholder equity posing potential risks.

Income Statement

The company's TTM data shows a decline in revenue and a negative net income, indicating profitability challenges. Gross profit margin stands at 52.7%, which is robust. However, EBIT and EBITDA margins are declining, reflecting cost pressures. Revenue growth is negative compared to the previous annual period, highlighting a concerning trend.

Balance Sheet

The balance sheet displays moderate financial leverage with a debt-to-equity ratio of approximately 0.65, suggesting manageable debt levels. The equity ratio is 29%, which provides a cushion against liabilities. However, declining stockholder equity over time could pose risks if not addressed.

Cash Flow

The cash flow statement shows strong free cash flow generation, with a positive free cash flow to net income ratio despite net losses. Operating cash flow remains positive, indicating good cash management practices. However, fluctuations in cash flow due to financing activities could impact liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.93B	9.48B	8.87B	9.00B	9.35B
	Gross Profit
4.43B	4.14B	3.62B	4.55B	3.73B
	EBIT
627.00M	1.36B	1.18B	2.20B	1.61B
	EBITDA
627.00M	2.02B	1.88B	2.40B	2.38B
	Net Income Common Stockholders
-98.00M	1.05B	1.01B	2.16B	996.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.89B	1.42B	1.26B	4.69B	2.09B
	Total Assets
27.68B	29.09B	31.77B	34.97B	38.53B
	Total Debt
5.93B	5.94B	5.47B	5.47B	6.71B
	Net Debt
4.04B	4.52B	4.21B	785.00M	4.62B
	Total Liabilities
19.66B	19.50B	21.68B	21.66B	27.60B
	Stockholders Equity
7.94B	9.52B	10.02B	13.26B	10.82B
Cash Flow		Free Cash Flow
1.27B	1.10B	608.00M	1.86B	1.49B
	Operating Cash Flow
1.51B	1.34B	812.00M	2.06B	1.77B
	Investing Cash Flow
250.00M	-1.08B	-173.00M	2.77B	-160.00M
	Financing Cash Flow
-459.00M	-1.20B	-3.44B	-3.11B	-434.00M

Willis Towers Watson Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 309.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTW, the sentiment is Negative. The current price of 309.07 is below the 20-day moving average (MA) of 313.55, below the 50-day MA of 322.60, and above the 200-day MA of 307.17, indicating a neutral trend. The MACD of -4.32 indicates Negative momentum. The RSI at 44.61 is Neutral, neither overbought nor oversold. The STOCH value of 67.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WTW.

Willis Towers Watson Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BRO	77 Outperform	$31.64B	30.78	16.18%	0.50%	12.57%	10.52%
AJG	74 Outperform	$84.67B	50.93	9.27%	0.72%	14.07%	31.44%
MMC	73 Outperform	$111.70B	27.79	30.51%	1.44%	7.56%	3.39%
ERIE	72 Outperform	$16.82B	30.97	32.38%	1.49%	15.05%	26.80%
AON	69 Neutral	$77.29B	30.29	74.17%	0.76%	19.57%	-8.09%
WTW	65 Neutral	$30.49B	―	-0.60%	1.15%	2.42%	-103.64%
Sector *	64 Neutral	$12.58B	9.71	7.88%	16985.68%	12.28%	-5.68%

Willis Towers Watson Corporate Events

Willis Towers Watson Announces Leadership Transition in 2025

On March 3, 2025, Willis Towers Watson announced that Paul Thomas, the current Non-Executive Chair of the Board, will retire at the end of his term and not seek re-election at the 2025 Annual General Meeting. Paul Reilly, an independent director since October 2022, has been selected to succeed Thomas as the Non-Executive Chair, pending his re-election. This leadership transition is expected to further strengthen WTW’s strategic direction and performance, with Reilly’s extensive experience in global financial and professional services anticipated to be beneficial in driving the company’s future success.