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Marsh & McLennan Companies (MRSH)
NYSE:MRSH
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Marsh & McLennan Companies
(NYSE:MRSH)
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Rating:62Neutral
Price Target:
$190.00
▲(1.91% Upside)
Action:ReiteratedDate:02/21/26
The score is driven primarily by strong operating results and cash generation, but is held back by materially higher leverage and a very thin equity cushion. Technical momentum is currently weak versus key moving averages, while valuation is moderate with a modest dividend. Earnings-call guidance is positive on margins and EPS, though near-term headwinds (pricing softness, lower fiduciary income, and transformation charges) and ongoing debt considerations temper the outlook.
Positive Factors
Strong free cash flow generation
Consistent, sizable FCF (~$5B in 2025) underpins durable capital flexibility: funds dividends, record share repurchases, and M&A while supporting reinvestment in tech and margin programs. Reliable cash conversion (0.86–0.95x earnings) strengthens earnings quality and strategic optionality.
Sustained revenue growth and margin expansion
Multi-year revenue increase with steady gross and EBIT margins shows durable demand across businesses and scalable operating leverage. Eighteen consecutive years of reported margin expansion indicates structural efficiency improvements and pricing/portfolio mix that support long-term profitability.
Diversified services, M&A and tech-driven productivity
Broad professional-services mix (brokerage, reinsurance, consulting) plus targeted acquisitions and a technology/Thrive program create multiple durable growth levers. Investments in AI/tools and integrated offerings increase client stickiness and potential margin uplift over coming years.
Negative Factors
Elevated leverage and thin equity cushion
Extremely high debt-to-equity reduces financial flexibility and amplifies risk to capital returns or M&A if cash flow weakens. A thin equity buffer makes the firm more sensitive to shocks, constrains balance-sheet optionality and raises priority on deleveraging over riskier growth investments.
Softening insurance and reinsurance pricing
Sustained pressure on P&C and reinsurance pricing compresses commission and brokerage revenue over cycles. Structural price normalization limits top-line growth visibility and reduces the natural margin tailwind from premium rate increases, testing organic growth in core distribution businesses.
Lower fiduciary income and sizable transformation charges
Declining fiduciary income from lower rates removes a recurring revenue tailwind, while large one-time transformation charges create near-term earnings and cash volatility. Execution risk on cost-savings and reinvestment could delay margin gains and complicate deleveraging plans.
Marsh & McLennan Companies (MRSH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$90.26B
Dividend Yield1.85%
Average Volume (3M)3.19M
Price to Earnings (P/E)22.2
Beta (1Y)0.34
Revenue Growth10.57%
EPS Growth2.57%
CountryUS
Employees90,000
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)2.12
Shares Outstanding484,124,270
10 Day Avg. Volume2,859,796
30 Day Avg. Volume3,194,439
Financial Highlights & Ratios
PEG Ratio7.79
Price to Book (P/B)5.98
Price to Sales (P/S)3.35
P/FCF Ratio18.07
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue4.08
Enterprise Value/Gross Profit9.66
Enterprise Value/Ebitda14.90
Forecast
1Y Price Target
$207.75Price Target Upside11.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering18
EPS Forecast (FY)10.38
Revenue Forecast (FY)$28.32B
Marsh & McLennan Companies Business Overview & Revenue Model
Company DescriptionMarsh & McLennan Cos., Inc. is a professional services firm, which offers clients advice and solutions in risk, strategy and people. The company is headquartered in New York, New York and currently employs 65,000 full-time employees. The firm is the parent company of various risk advisors and specialty consultants, including Marsh, the insurance broker; Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of human resource and investment related financial advice and services, and Oliver Wyman Group, the management and economic consultancy. The company conducts business through two segments: Risk and Insurance Services, which includes risk management activities, as well as insurance and reinsurance broking and services, and Consulting includes health, retirement, talent and investments consulting services and products, and specialized management, economic and brand consulting services. The company conducts business in the Risk and Insurance Services segment through Marsh and Guy Carpenter. The company conducts business in the Consulting segment through Mercer and Oliver Wyman Group.
How the Company Makes MoneyMarsh & McLennan Companies generates revenue primarily through fees and commissions for its professional services. The Marsh segment earns money by providing insurance brokerage and risk management solutions, charging clients a commission on premiums placed with insurers. Guy Carpenter generates revenue through advisory services and commissions related to reinsurance placements. Mercer derives its income from consulting fees for its health, wealth, and talent management services, often involving long-term contracts with organizations. Oliver Wyman earns revenue through consulting fees for strategic advisory services. Additionally, MMC benefits from significant partnerships with leading insurers and corporations, enhancing its service offerings and expanding its client base, which contributes to its overall earnings.
Marsh & McLennan Companies Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down total revenue by business unit, showing which areas contribute most to the top line and potential growth drivers.
Breaks down total revenue by business unit, showing which areas contribute most to the top line and potential growth drivers.
Data provided by:
The Fly
The FlyMarsh & McLennan Companies Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive financial and strategic story: strong full-year and quarterly results, margin expansion, substantial free cash flow, active capital return and M&A activity, and launch of the Thrive program and technology initiatives which position the firm for future efficiency and growth. These positives are tempered by clear near-term headwinds—most notably declining insurance and reinsurance pricing, lower fiduciary income from falling interest rates, one-time transformation charges, and pockets of regional softness. Management expects 2026 underlying revenue growth similar to 2025 with continued margin expansion, signaling confidence despite market pressures.Q4-2025 Updates
Positive Updates
Strong Full-Year Revenue and Underlying Growth
Total revenue grew 10% year-over-year to $27,000,000,000 with underlying revenue growth of 4% for fiscal 2025, demonstrating broad-based top-line strength.
Robust Profitability and Margin Expansion
Adjusted operating income increased 11% to $7,300,000,000 and adjusted operating margin improved by 30 basis points (18th consecutive year of reported margin expansion); adjusted EPS grew 9% (full-year adjusted EPS $9.75).
Quarterly Financial Momentum
Q4 consolidated revenue rose 9% to $6,600,000,000 with 4% underlying growth; adjusted operating income for the quarter was $1,600,000,000 (up 12%), adjusted operating margin increased 40 bps to 23.7%, and adjusted EPS was $2.12 (up 10%).
Strong Free Cash Flow and Capital Returns
Generated free cash flow of $5,000,000,000 in 2025 (up 25% from $4,000,000,000) and returned significant capital: a 10% increase in the quarterly dividend and $2,000,000,000 in share repurchases (largest annual amount in company history).
Active M&A and Strategic Investments
Invested approximately $850,000,000 in acquisitions (including completion and integration of McGriff, the largest acquisition ever) and deployed $847M of acquisitions for the year; management emphasizes continued M&A pipeline and intends to favor accretive acquisitions.
Launch of Thrive Program, Brand Refresh, and Technology Initiatives
Announced and began executing Thrive (targeting $400,000,000 of savings), launched new Marsh brand and ticker (MRSH), formed Business and Client Services (BCS) to scale AI/analytics, and rolled out client-facing technologies (Centrisq, AIDA) and dozens of AI-driven productivity tools.
Segment-Level Growth Across Businesses
Segment performance included Marsh Risk full-year underlying growth of 4% (Q4 underlying +3%), Guy Carpenter full-year underlying growth 5% (Q4 underlying +5%), Consulting underlying growth 5% (Q4 consulting +5% underlying), Mercer underlying growth 4% (Q4 +4% underlying), and Marsh Management Consulting underlying growth 6% for the year (Q4 +8%).
Assets Under Management Increase
Mercer's assets under management totaled $692,000,000,000 at quarter end, up 12% year-over-year and 1% sequentially, driven by acquisitions and capital markets.
Negative Updates
Softening Insurance and Reinsurance Pricing
Market pricing headwinds: Marsh Global Insurance Market Index renewal rates decreased 4% in Q4; global property rates decreased 9% year-over-year (Q4), other regions saw mid- to double-digit rate declines—this creates a headwind to organic revenue growth in P&C and reinsurance-exposed lines.
Reinsurance Market Pressure and January Price Acceleration
Property cat reinsurance softened as reinsurers deployed more capital; price decreases accelerated at Jan 1 with cedents achieving double-digit reductions on some placements—potential negative impact on reinsurance-related revenue and commissions.
Fiduciary Interest Income Decline Due to Lower Rates
Fiduciary interest income fell $20,000,000 to $92,000,000 in the quarter compared with prior year; company expects fiduciary interest income of approximately $83,000,000 in Q1, reflecting continued headwind from lower interest rates.
One-Time and Transformation Costs
Fourth quarter recorded $210,000,000 of noteworthy items including $112,000,000 of Thrive-related costs; company expects approximately $500,000,000 of charges to generate targeted $400,000,000 of savings—near-term expense and execution risk.
Regional and Product Softness in Specific Areas
Latin America revenue declined 4% underlying in the quarter due to 18-month policy renewals; Mercer Career offering down 2% amid softness in US/Canada project work; workers' compensation saw a 1% decrease—pockets of weakness exist.
Elevated Debt Level
Total debt ended the quarter at $19,600,000,000 with the next scheduled maturity of $600,000,000 in H1 2026—while manageable, leverage remains noteworthy alongside planned capital deployment (~$5,000,000,000 in 2026).
Industry Valuation and M&A Multiple Risk
Deterioration in publicly traded broker valuations could widen bid-ask spreads and slow M&A activity; management noted the potential for impact on deal flow and multiples, which could influence strategic deployment of capital.
Macroeconomic and Geopolitical Complexity
Management highlighted an era of 'polycrises' (geopolitical conflict, trade tensions, AI disruption, extreme weather) that creates uncertainty for clients and could pressure demand and risk costs across lines of business.
Company Guidance
Management guided that 2026 underlying revenue growth should be similar to 2025 (about 4%), with continued margin expansion and “solid” adjusted EPS growth (building on 2025 adjusted EPS of $9.75, +9%); they reiterated Thrive targets of $400 million of total savings (offset by roughly $500 million of one‑time charges, with a portion reinvested), and gave near‑term financial pointers including Q1 fiduciary interest income of ~ $83 million, Q1 interest expense of ~ $240 million, and an expected adjusted effective tax rate of 24.5%–25.5% for 2026 (no meaningful Q1 discrete tax benefit anticipated). Management also said it expects to deploy approximately $5.0 billion of capital in 2026 across dividends, acquisitions and share repurchases and noted a $600 million senior‑note maturity in H1 2026; all outlooks remain subject to change with economic conditions.Marsh & McLennan Companies Financial Statement Overview
Summary
Strong and consistent operating performance with steady revenue growth over 2020–2025, durable margins, and solid free-cash-flow generation (FCF ~$5.0B in 2025). The major offset is balance-sheet risk: equity fell to roughly ~$0.6B in 2025 against ~$21.4B of debt, materially increasing leverage and reducing financial flexibility.Income Statement
Revenue has grown steadily from $17.2B (2020) to $27.0B (2025), with margins remaining strong and relatively stable (gross margin ~42%, EBIT margin ~24%, net margin ~15–17% in most years). Profit dollars expanded alongside sales (net income $2.0B to $4.16B). The key drawback is the sharp slowdown in top-line growth in 2025 (about 2%), and net margin dipped from 2024 to 2025, suggesting some pressure on profitability despite higher revenue.83
Very Positive
Balance Sheet
Leverage appears elevated and has worsened materially in 2025: total debt is ~$21.4B while reported equity fell to ~$0.6B, driving an extremely high debt-to-equity level (vs ~1.3–1.6x in 2020–2024). While assets increased over time, the very thin equity cushion in 2025 meaningfully raises balance-sheet risk and reduces flexibility compared with prior years.38
Negative
Cash Flow
Cash generation is solid and improving: operating cash flow rose to ~$5.3B in 2025 (from ~$3.4B in 2020) and free cash flow reached ~$5.0B, with strong free-cash-flow growth in 2025. Free cash flow closely tracks reported earnings (roughly 0.86–0.95x over the period), which supports earnings quality. A watch item is that operating cash flow covers only a modest share of total debt (low-to-mid 20% range in 2023–2025), leaving the company reliant on continued consistent cash generation and capital access.76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 26.98B | 24.46B | 22.74B | 20.72B | 19.82B |
| Gross Profit | 11.40B | 10.46B | 9.64B | 8.65B | 8.39B |
| EBITDA | 7.39B | 6.93B | 6.32B | 5.27B | 5.40B |
| Net Income | 4.16B | 4.06B | 3.76B | 3.05B | 3.14B |
Balance Sheet | |||||
| Total Assets | 58.71B | 56.48B | 48.03B | 44.11B | 34.39B |
| Cash, Cash Equivalents and Short-Term Investments | 2.69B | 2.40B | 3.36B | 1.44B | 1.75B |
| Total Debt | 21.45B | 21.86B | 15.44B | 13.47B | 13.16B |
| Total Liabilities | 43.40B | 42.95B | 35.66B | 33.37B | 23.17B |
| Stockholders Equity | 15.10B | 13.34B | 12.19B | 10.52B | 11.01B |
Cash Flow | |||||
| Free Cash Flow | 5.00B | 3.99B | 3.84B | 3.00B | 3.11B |
| Operating Cash Flow | 5.29B | 4.30B | 4.26B | 3.46B | 3.52B |
| Investing Cash Flow | -845.00M | -8.82B | -1.42B | -850.00M | -1.16B |
| Financing Cash Flow | -4.63B | 4.46B | -1.12B | -1.05B | -1.30B |
Marsh & McLennan Companies Technical Analysis
Positive
186.43
Price Trends
182.38
Positive
183.82
Positive
196.54
Negative
Market Momentum
0.01
Negative
60.09
Neutral
94.75
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MRSH, the sentiment is Positive. The current price of 186.43 is above the 20-day moving average (MA) of 180.74, above the 50-day MA of 182.38, and below the 200-day MA of 196.54, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 60.09 is Neutral, neither overbought nor oversold. The STOCH value of 94.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MRSH.
Marsh & McLennan Companies Risk Analysis
Marsh & McLennan Companies disclosed 34 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 0 New Risks
Marsh & McLennan Companies Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $12.42B | 25.38 | 26.19% | 1.90% | 9.64% | 15.87% | |
71 Outperform | $72.38B | 19.71 | 47.76% | 0.82% | 14.06% | 5.52% | |
69 Neutral | $58.95B | 39.73 | 6.87% | 1.01% | 17.17% | 19.12% | |
68 Neutral | $28.75B | 18.82 | 20.17% | 1.14% | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $24.63B | 22.73 | 10.98% | 0.77% | 17.87% | -9.35% | |
62 Neutral | $90.26B | 22.18 | 29.25% | 1.85% | 10.57% | 2.57% |
* Financial Sector Average
MRSH
Marsh & McLennan Companies
186.43
-46.30
-19.90%
AON
Aon
337.80
-63.45
-15.81%
AJG
Arthur J Gallagher & Co
229.27
-105.07
-31.43%
BRO
Brown & Brown
72.36
-45.94
-38.83%
ERIE
Erie Indemnity Company
266.75
-166.29
-38.40%
WTW
Willis Towers Watson
304.12
-27.01
-8.16%
Marsh & McLennan Companies Corporate Events
Private Placements and Financing
Marsh & McLennan Issues $600 Million Senior Notes
Positive
Feb 19, 2026
On February 11, 2026, Marsh & McLennan Companies, Inc. entered into an underwriting agreement with a syndicate led by Citigroup Global Markets, J.P. Morgan Securities and Wells Fargo Securities for a $600 million issuance of 4.950% senior notes due 2036. The notes, issued on February 19, 2026 under an existing 2011 indenture with The Bank of New York Mellon as trustee, were sold off the company’s effective shelf registration and further supported by a legal opinion from Davis Polk & Wardwell on their validity, bolstering the firm’s long-term funding profile.
The most recent analyst rating on (MRSH) stock is a Buy with a $225.00 price target. To see the full list of analyst forecasts on Marsh & McLennan Companies stock, see the MRSH Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.