Willis Towers Stock Rises 38.8% in a Year: More Room for Growth?

Core Viewpoint - Willis Towers Watson Public Limited Company (WTW) has outperformed its industry and the broader market, with a share price increase of 38.8% over the past year, compared to the industry's growth of 17.1% and the S&P 500's return of 24.8% [1][2] Financial Performance - WTW has a market capitalization of $29.25 billion, with an average trading volume of 0.4 million shares over the last three months [1] - The Zacks Consensus Estimate for WTW's 2024 earnings per share indicates a year-over-year increase of 13.9%, with revenues projected at $9.94 billion, reflecting a 4.8% year-over-year improvement [4] - For 2025, the consensus estimates suggest earnings per share and revenues will increase by 12.4% and 5%, respectively, compared to 2024 [4] Growth Drivers - The company's growth is attributed to new business, strategic acquisitions, geographic diversification, solid customer retention, and a strong capital position [2] - WTW's growth strategy focuses on improving operating margins, increasing free cash flow conversion, and driving sustainable revenue growth, particularly in Risk and Broking and Individual Marketplace segments [5] - The Health, Wealth & Career and Risk & Broking segments have shown strong performance, with revenue growth across most operating regions for 15 consecutive quarters [6] Operational Outlook - WTW expects to deliver revenues exceeding $9.9 billion, with adjusted operating margins and adjusted EPS targets raised to 23-23.5% and $16-$17, respectively, based on strong first-half performance [7] - The company anticipates a year-over-year improvement in free cash flow margin in 2024 [7] - WTW has a five-year CAGR of 6.2% for dividends, with a current dividend yield of 1.2%, above the industry average of 1% [7] Analyst Sentiment - The Zacks Consensus Estimate for WTW's earnings has been revised upward by 1.4% and 1.5% for 2024 and 2025, respectively, indicating analyst optimism [3]