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Is a Beat in Store for Marsh & McLennan (MMC) in Q4 Earnings?

Marsh & McLennan Companies, Inc. MMC is slated to report fourth-quarter 2021 earnings on Jan 27, before the market opens.

Q4 Estimates

The Zacks Consensus Estimate for MMC’s fourth-quarter earnings per share is pegged at $1.34, which indicates an improvement of 12.6% from the prior-year quarter’s reported figure.

The consensus mark for revenues stands at $4.9 billion, suggesting growth of 11.5% from the year-ago quarter.

Earnings Surprise History

Marsh & McLennan boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 13.45%. This is depicted in the chart below:

What Our Quantitative Model Unveils

Our proven model predicts an earnings beat for Marsh & McLennan 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.

Earnings ESP: Marsh & McLennan has an Earnings ESP of +2.76%. This is because the Most Accurate Estimate of $1.38 is pegged higher than the Zacks Consensus Estimate of $1.34. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Marsh & McLennan carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

Marsh & McLennan’s fourth-quarter performance is likely to have benefited from continuous rate increases across the commercial property and casualty (P&C) insurance, and reinsurance markets. Solid contributions made by the Risk and Insurance Services and Consulting segments might have favored the to-be-reported quarter’s performance.

The Risk and Insurance Services segment is expected to have received a boost from strong revenues reported across Marsh and Guy Carpenter units. New business growth and robust retention rates may have favored Marsh’s performance in the fourth quarter. The U.S. and Canada division might have contributed to the unit’s performance. Meanwhile, Guy Carpenter’s results are expected to have benefited from broad-based growth across geographies and specialties.

The Zacks Consensus Estimate for the Marsh & McLennan’s Risk and Insurance Services segment revenues is pegged at $2.9 billion, which indicates a rise of 13.9% from the prior-year quarter. The consensus mark for Marsh and Guy Carpenter revenues stands at $2.7 billion and $179 million, suggesting improvements of 14.2% and 10.5%, respectively, from the year-ago quarter’s reported numbers.

MMC’s Consulting segment’s performance is likely to have gained on the back of strong results reported in its Mercer and Oliver Wyman units. The Zacks Consensus Estimate for the segment’s revenues is pegged at $2.1 billion, indicating 9.3% growth from the prior-year quarter.

The performance of the Mercer unit is likely to have been driven by the steady turnaround of the global economy, solid investment management growth and decent rise in defined benefit. The consensus estimate for Mercer’s revenues stands at $1.4 billion, suggesting a rise of 3% from the year-ago quarter’s reported number. Meanwhile, another Consulting segment unit named Oliver Wyman is likely to have received a boost from the solid demand across most geographies and practices in the fourth quarter. The consensus mark for Oliver Wyman’s revenues is pegged at $690 million, which suggests an improvement of 16.9% from the prior-year quarter.

While MMC’s fourth-quarter margins are likely to have benefited on the back of revenue growth, higher expenses incurred on strategic hiring and constant investments to drive business growth might have acted as a drag.

Per the last earnings call, foreign exchange is expected to have an adverse but moderate impact on Marsh & McLennan’s margins in the fourth quarter. Management forecast an interest expense of $107 million in the to-be-reported quarter.

Other Stocks to Consider

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

Ameris Bancorp ABCB has an Earnings ESP of +2.41% and a Zacks Rank #1. ABCB is slated to release fourth-quarter results on Jan 27.

Arch Capital Group Ltd. ACGL has an Earnings ESP of +1.48% and a Zacks Rank #2. ACGL is expected to report fourth-quarter results on Feb 9.

Essent Group Ltd. ESNT has an Earnings ESP of +3.11% and a Zacks Rank of 2 at present. ESNT is slated to release fourth-quarter results on Feb 11.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Marsh & McLennan Companies, Inc. (MMC): Free Stock Analysis Report
 
Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report
 
Ameris Bancorp (ABCB): Free Stock Analysis Report
 
Essent Group Ltd. (ESNT): Free Stock Analysis Report
 
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