Wells Fargo says Marsh McLennan shares should trade down following results

Wells Fargo notes Marsh McLennan (MMC) reported Q2 adjusted EPS of $2.72, beating the firm’s $2.68 and consensus of $2.67. The upside stemmed from a combination of non-core items including investment income, lower interest expense, and slightly lower adjusted tax rate. Wells believes shares should trade down. While there was a modest EPS beat and organic was steady with the Q1 and in line with the firm, the beat was on non-core items. Further, Consulting organic slowed to 3%, with a slowdown within both Mercer and Oliver Wyman. While organic was in line with us in RIS, the margin missed Wells in the segment and on an overall basis. The firm has an Overweight rating and a price target of $229 on the shares.