Willis Towers Watson (WTW) AI Stock Analysis

• Market Cap: $33.04B
• Dividend Yield: 1.07%
• Average Volume (3M): 623.26K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.14
• Revenue Growth: 4.74%
• EPS Growth: -108.62%
• Country: US
• Employees: 49,000
• Sector: Financial
• Sector Strength: 84
• Industry: Insurance - Brokers
• EPS (TTM): -1.01
• Shares Outstanding: 99,380,820
• 10 Day Avg. Volume: 681,286
• 30 Day Avg. Volume: 623,265
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.34
• Price to Cash Flow (P/CF): 13.80
• P/FCF Ratio: 13.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $359.93
• Price Target Upside: 16.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

Willis Towers Watson presents a stable investment opportunity with strong technical indicators and positive earnings call sentiment. However, valuation challenges due to a negative P/E ratio and profitability concerns from the financial performance analysis are key risks. The leadership transition is expected to be beneficial, but the company's ability to manage leverage and enhance profitability remains crucial for future performance.

Positive Factors

Capital Management

Share repurchases exceeded consensus expectations, indicating strong capital management and shareholder returns.

Margin Improvements

WTW expects margin improvements due to divestitures, transformation programs, and productivity enhancements, which will likely lead to a higher valuation.

Valuation

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

Negative Factors

Cost Challenges

WTW faces headwinds such as pension adjustments and other expected challenges like reinsurance JV costs and foreign exchange impacts.

Growth Challenges

HWC organic growth was slightly weaker than expected, suggesting potential headwinds in this segment.

Revenue Performance

Revenue came slightly below consensus in both HWC and R&B segments, indicating some challenges in meeting revenue 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 shows a stable financial condition with some growth and profitability challenges. Despite strong revenue growth and cash flow generation, the company faces reduced net profitability and increased leverage. Strategic focus on cost management and debt reduction could enhance future financial performance. Overall, the company's financials are stable, but there are areas for improvement to ensure long-term growth and profitability.

Income Statement

The income statement reflects moderate growth and profitability. The revenue growth rate from 2023 to 2024 stands at 4.71%, indicating steady growth. Gross profit margin remains strong at 100% due to the nature of the industry. However, the net profit margin has declined significantly from 11.12% in 2023 to 2.98% in 2024, reflecting increased expenses or other financial pressures. EBIT and EBITDA margins have also decreased from 14.39% and 21.29% in 2023 to 6.31% in 2024, further indicating reduced operational efficiency.

Balance Sheet

The balance sheet reveals a stable financial position with some concerns. The debt-to-equity ratio has increased to 0.73 in 2024 from 0.62 in 2023, indicating higher leverage. The return on equity (ROE) has decreased from 11.08% to 3.73%, reflecting reduced profitability. However, the equity ratio remains solid at 28.67% in 2024, suggesting a relatively stable capital structure.

Cash Flow

Cash flow statements indicate a strong cash position with positive growth. Free cash flow has grown by 37.12% from 2023 to 2024, highlighting improved cash generation. The operating cash flow to net income ratio has increased to 5.11 in 2024, suggesting strong cash generation relative to net income. Additionally, the free cash flow to net income ratio of 5.11 shows that the company is generating significant cash flows beyond net income.

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
823.00M	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
5.81B	5.94B	5.47B	5.47B	6.71B
	Net Debt
3.92B	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
1.51B	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: Positive
• Last Price: 308.80
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 308.8 is below the 20-day moving average (MA) of 332.07, below the 50-day MA of 328.72, and above the 200-day MA of 300.56, indicating a bullish trend. The MACD of 3.04 indicates Negative momentum. The RSI at 57.84 is Neutral, neither overbought nor oversold. The STOCH value of 57.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTW.

Willis Towers Watson Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AJG	79 Outperform	$88.08B	52.98	9.46%	0.71%	15.21%	46.99%
BRO	77 Outperform	$35.67B	36.02	16.35%	0.45%	12.89%	13.50%
ERIE	76 Outperform	$19.63B	37.00	32.89%	1.23%	16.38%	34.58%
MMC	76 Outperform	$120.40B	29.84	31.80%	1.29%	7.60%	8.66%
AON	73 Outperform	$85.17B	31.57	100.25%	0.68%	17.51%	1.31%
WTW	72 Outperform	$33.04B	―	-1.12%	1.07%	4.74%	-108.62%
Sector *	63 Neutral	$14.39B	9.81	8.95%	4.37%	16.38%	-11.64%

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.