Willis Towers Watson PLC
NASDAQ:WTW
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Intrinsic Value
The intrinsic value of one WTW stock under the Base Case scenario is 297.73 USD. Compared to the current market price of 288.35 USD, Willis Towers Watson PLC is Undervalued by 3%.
The Intrinsic Value is calculated as the average of DCF and Relative values:
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Willis Towers Watson PLC
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Fundamental Analysis
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Willis Towers Watson PLC, a global leader in advisory, broking, and solutions, stands at the crossroads of risk management and financial excellence. The company was formed in 2016 through the merger of Willis Group Holdings and Towers Watson, creating a powerhouse that leverages deep industry knowledge and advanced analytics to serve clients worldwide. With a commitment to helping organizations manage risk, optimize benefits, and improve workforce performance, Willis Towers Watson helps businesses navigate complex challenges in today’s ever-changing economic landscape. Its diverse portfolio spans various sectors, providing investors with exposure to innovative solutions that enhance operatio...
Willis Towers Watson PLC, a global leader in advisory, broking, and solutions, stands at the crossroads of risk management and financial excellence. The company was formed in 2016 through the merger of Willis Group Holdings and Towers Watson, creating a powerhouse that leverages deep industry knowledge and advanced analytics to serve clients worldwide. With a commitment to helping organizations manage risk, optimize benefits, and improve workforce performance, Willis Towers Watson helps businesses navigate complex challenges in today’s ever-changing economic landscape. Its diverse portfolio spans various sectors, providing investors with exposure to innovative solutions that enhance operational efficiency and drive sustainable growth.
Investors will find Willis Towers Watson appealing not only for its robust client relationships and global reach but also for its strategic focus on technology and data-driven insights. The company continually invests in digital transformation, enhancing its capacity to deliver customized solutions that address evolving market demands. As firms increasingly prioritize resilience in the face of uncertainty, Willis Towers Watson's expertise in risk management and employee benefits positions it as a crucial partner for organizations. With a strong financial foundation, a well-defined growth strategy, and an emphasis on long-term value creation, Willis Towers Watson remains well-equipped to capitalize on emerging opportunities and deliver favorable returns for its stakeholders.
Willis Towers Watson PLC is a global advisory, broking, and solutions company that operates in several core business segments. Here are the primary segments:
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Risk Management: This segment focuses on helping clients manage various types of risk, including insurance and reinsurance. It provides services related to risk assessment, insurance program design, and claims management, helping organizations to identify and mitigate risks effectively.
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Insurance Brokerage: Willis Towers Watson serves as an intermediary between clients and insurance providers. This segment offers services in risk transfer, insurance placement, and policy negotiation, catering to businesses across multiple industries.
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Consulting: This includes a wide range of consulting services concerning human capital, benefits, and employee programs. The consulting segment helps organizations optimize employee benefits, compensation, and health and welfare programs, often integrating technological solutions to improve decision-making and operational efficiency.
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Talent and Rewards: This area focuses on advising organizations on how to attract, retain, and engage talent. Services include compensation benchmarking, performance management, and employee engagement strategies.
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Health Solutions: Willis Towers Watson offers consulting services related to health and wellness, including health benefits strategy, health plans design, and employee wellness programs. This segment aims to improve employee health outcomes while managing costs.
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Data Services and Technology: The company provides analytical tools, technology solutions, and data insights to help organizations make informed decisions about their risks, workforce, and benefits.
These business segments enable Willis Towers Watson to provide comprehensive solutions to its clients, enhancing their operational effectiveness while managing risks and maximizing their human capital.
Willis Towers Watson PLC (WTW) operates in the professional services sector, particularly in risk management, insurance brokerage, and consulting services. Its competitive advantages over rivals can be categorized into several key areas:
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Comprehensive Service Offerings: WTW provides a broad range of services, including risk management, insurance brokerage, human capital and benefits, and retirement consulting. This diversification allows it to cater to various client needs, making it a one-stop shop for many organizations.
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Strong Global Presence: WTW has a well-established global footprint, with operations in numerous countries. This extensive network enables the company to serve multinational clients effectively and access diverse markets, which can be a significant advantage over regional competitors.
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Innovative Technology Solutions: The company invests in advanced technology and analytics to enhance its service delivery and provide clients with data-driven insights. By leveraging technology, WTW can improve operational efficiency and offer tailored solutions, positioning itself as a leader in digital transformation within the industry.
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Expertise and Experience: WTW boasts a team of experienced professionals with deep industry knowledge. This expertise allows the firm to offer high-quality advice and solutions, fostering strong client relationships and trust.
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Strong Brand Reputation: The company's longstanding presence in the industry and its reputation for reliability and professionalism help it attract and retain clients. A strong brand can be a significant competitive advantage in professional services.
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Diverse Client Base: WTW serves a wide array of clients, from small businesses to large corporations. This diversity helps mitigate risk, as the company is less reliant on any single sector or group of clients.
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Strategic Partnerships and Alliances: Willis Towers Watson develops strategic relationships with various industry players, including technology firms and insurance companies. These partnerships can enhance service offerings and provide clients with superior solutions compared to competitors.
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Risk Management Expertise: The firm has a strong focus on risk management, which can be a key differentiator in today’s volatile business climate. WTW’s comprehensive risk management strategies can help organizations navigate complex challenges effectively.
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Employee-Centric Culture: WTW prioritizes employee engagement and development, which can lead to higher levels of service quality and employee retention. A motivated workforce often translates into better client service and innovation.
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Sustainability Focus: WTW’s commitment to sustainability and responsible business practices appeals to increasingly conscientious investors and clients. This focus sets the company apart in a market where these issues are becoming increasingly significant.
By leveraging these competitive advantages, Willis Towers Watson PLC can differentiate itself in the professional services landscape, attracting clients and achieving growth in a competitive environment.
Willis Towers Watson PLC (WTW) faces several risks and challenges in the near future, which can impact its operations and market position. Here are some key areas to consider:
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Market Conditions: Economic downturns or fluctuations can affect demand for insurance and risk management services. In a recession, companies may reduce their spending on consulting services, affecting WTW’s revenue.
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Regulatory Changes: The insurance and consulting industries are heavily regulated. Changes in regulations in various countries can impact WTW’s operations and profitability. Compliance costs can also increase.
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Competition: The professional services and insurance brokerage sectors are competitive, with numerous players vying for market share. WTW faces competition from both traditional firms and emerging technology-driven companies that offer disruptive services.
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Technological Disruption: The pace of digital transformation is accelerating. WTW must continue to innovate and adopt new technologies to stay relevant. Failure to do so could result in loss of clients to competitors who offer better technology-driven solutions.
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Cybersecurity Threats: As a data-driven company, WTW is vulnerable to cybersecurity threats. A significant cyber incident could lead to reputational damage, loss of client trust, and regulatory penalties.
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Talent Retention and Acquisition: Attracting and retaining skilled employees is crucial for WTW's success. The ongoing talent war, particularly in tech and data analytics areas, poses challenges, especially in a remote work environment.
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Integration of Recent Mergers/Acquisitions: WTW has undergone several mergers and acquisitions. Successfully integrating new businesses and cultures can be a significant challenge and can distract from the core operations.
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Global Health Risks: Ongoing and emerging global health risks, such as pandemics, can affect WTW’s operations and the insurance markets. They may also lead to changes in client needs and expectations.
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Client Concentration: Dependence on a limited number of large clients can make WTW vulnerable to changes in those clients’ business conditions, which can affect revenue stability.
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Geopolitical Risks: Political instability, trade wars, and changes in international relations can have adverse impacts on WTW’s global operations and client base.
Addressing these risks effectively will require WTW to implement robust risk management strategies, continuously innovate, and focus on maintaining strong client relationships.
Revenue & Expenses Breakdown
Willis Towers Watson PLC
Balance Sheet Decomposition
Willis Towers Watson PLC
Current Assets | 14B |
Cash & Short-Term Investments | 1.2B |
Receivables | 2.6B |
Other Current Assets | 10.2B |
Non-Current Assets | 15.6B |
PP&E | 1.2B |
Intangibles | 12.1B |
Other Non-Current Assets | 2.3B |
Current Liabilities | 12.7B |
Accounts Payable | 1.1B |
Accrued Liabilities | 910m |
Other Current Liabilities | 10.7B |
Non-Current Liabilities | 7.6B |
Long-Term Debt | 5.3B |
Other Non-Current Liabilities | 2.3B |
Earnings Waterfall
Willis Towers Watson PLC
Revenue
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9.7B
USD
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Operating Expenses
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-7.7B
USD
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Operating Income
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2B
USD
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Other Expenses
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-873m
USD
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Net Income
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1.1B
USD
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Free Cash Flow Analysis
Willis Towers Watson PLC
USD | |
Free Cash Flow | USD |
WTW reported a robust second quarter, featuring a 240 basis point increase in adjusted operating margin and a 24% rise in diluted EPS to $2.55. The company achieved 6% organic revenue growth and $361 million in free cash flow. Based on this solid performance, WTW raised its 2024 adjusted operating margin target to 23-23.5% and EPS to $16-$17. The transformation program also identified additional savings, raising the target from $425 million to $450 million by year-end 2024. The company's strategic investments in talent and technology continue to drive productivity and growth, positioning it well for the remainder of the year.
What is Earnings Call?
WTW Profitability Score
Profitability Due Diligence
Willis Towers Watson PLC's profitability score is 55/100. The higher the profitability score, the more profitable the company is.
Score
Willis Towers Watson PLC's profitability score is 55/100. The higher the profitability score, the more profitable the company is.
WTW Solvency Score
Solvency Due Diligence
Willis Towers Watson PLC's solvency score is 47/100. The higher the solvency score, the more solvent the company is.
Score
Willis Towers Watson PLC's solvency score is 47/100. The higher the solvency score, the more solvent the company is.
Wall St
Price Targets
WTW Price Targets Summary
Willis Towers Watson PLC
According to Wall Street analysts, the average 1-year price target for WTW is 318.43 USD with a low forecast of 287.85 USD and a high forecast of 351.75 USD.
Shareholder Yield
Current shareholder yield for WTW is .
Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?
WTW Price
Willis Towers Watson PLC
Average Annual Return | 7.02% |
Standard Deviation of Annual Returns | 6.99% |
Max Drawdown | -33% |
Market Capitalization | 29.3B USD |
Shares Outstanding | 102 236 000 |
Percentage of Shares Shorted | 1.07% |
Ownership
WTW Insider Trading
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Description
Willis Towers Watson Plc engages in the provision of advisory, broking, and solutions services. The firm operates as a global advisory, broking and solutions company. The company is engaged in offering risk management, insurance broking, consulting, technology and solutions, and private exchanges. The firm operates through eight segments: Willis International; Willis North America; Willis Capital, Wholesale & Reinsurance (CWR); Willis GB; Towers Watson Benefits; Towers Watson Exchange Solutions; Towers Watson Risk and Financial Services; and Towers Watson Talent and Rewards. The Willis GB segment comprises four business units: Property and Casualty, Transport, Financial Lines and Retail Networks. The Willis Capital Wholesale and Reinsurance segment includes Willis Re; Willis Capital Markets & Advisory; Willis' wholesale business, and Willis Portfolio Underwriting Services. The Willis North America segment provides risk management, insurance brokerage and related risk services.
Contact
IPO
Employees
Officers
The intrinsic value of one WTW stock under the Base Case scenario is 297.73 USD.
Compared to the current market price of 288.35 USD, Willis Towers Watson PLC is Undervalued by 3%.