What's in the Cards for Willis Towers (WLTW) in Q3 Earnings?

Willis Towers Watson Public Limited Company WLTW is set to report third-quarter 2021 results on Oct 28, before market open. The company delivered an earnings surprise in each of the last four quarters, the average being 7.72%.

Factors to Note

The company’s third-quarter revenues are likely to have witnessed the impact of higher consulting work in North America, higher technology and administrative solutions revenues, new business wins across multiple lines, and favorable renewal factors.

The Zacks Consensus Estimate for revenues is pegged at $2.1 billion, indicating growth of 5.5% from the year-ago quarter.

Revenues at Human Capital and Benefits (HCB) segment are likely to have benefited from higher demand for advisory services across various lines of business, higher talent and rewards revenues, higher consulting work in North America. Continued expansion of local portfolios and global benefits management appointments as well as higher technology and administrative solutions revenues are also likely to have boosted the segment’s performance.

The Zacks Consensus Estimate for segment revenues stands at $837 million, indicating an increase of 5.1% from the year-ago quarter.

Revenues at Corporate Risk and Broking (CRB) segment are likely to have benefited from new business wins across multiple lines, including FINEX, aerospace, construction, marine and retail insurance lines, and renewal expansion. The consensus estimate for segment revenues stands at $693 million, indicating an increase of 6.8% from the prior-year reported figure.

Net new business, increased contingent performance fees and favorable renewal factors are likely to have resulted in reinsurance growth for Investment, Risk and Reinsurance (IRR) segment in the third quarter. All lines of business are likely to contribute to the segment’s results. However, soft wholesale revenues are likely to have been an offset. The consensus estimate for the IRR segment is pegged at $330 million, indicating a decline of 0.3% from the prior-year quarter.

Growth in Individual Marketplace, primarily by TRANZACT, along with strong growth in Medicare Advantage sales and higher benefits outsourcing revenues might have driven organic revenues in the Benefits Delivery and Administration (BDA) segment. The consensus estimate for the BDA segment stands at $257 million, suggesting year-over-year growth of 13.7%.

Expenses in the quarter to be reported are likely to have risen due to higher salaries and benefits, and transaction and integration expenses. The increase in expenses is likely to have been offset by lower travel and entertainment costs, bad debt expense, local office expenses, and professional fees, depreciation and amortization expenses.

The Zacks Consensus Estimate for earnings per share is pegged at $1.56, suggesting an increase of 17.2% from the year-ago reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Willis Towers this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Willis Towers has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at $1.56. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Willis Towers Watson Public Limited Company Price and EPS Surprise

Willis Towers Watson Public Limited Company Price and EPS Surprise

Willis Towers Watson Public Limited Company price-eps-surprise | Willis Towers Watson Public Limited Company Quote

Zacks Rank: Willis Towers carries a Zacks Rank of 4 (Sell).

Stocks to Consider

Some stocks worth considering from the insurance space with the perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:

Marsh & McLennan Companies, Inc. MMC has an Earnings ESP of +0.15 and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hartford Financial Services Group, Inc. HIG has an Earnings ESP of +5.61% and a Zacks Rank of 3.

MetLife, Inc. MET has an Earnings ESP of +1.20% and a Zacks Rank of 3.

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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report

MetLife, Inc. (MET) : Free Stock Analysis Report

Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report

Willis Towers Watson Public Limited Company (WLTW) : Free Stock Analysis Report

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