Willis Towers Watson Public Limited Company WTW is set to report first-quarter 2023 earnings on Apr 27, before market open. The brokerage insurer delivered an earnings surprise in each of the last four quarters, the average being 2.46%.
Factors at Play
Willis Towers’ first-quarter revenues are likely to have benefited from improved performance at wealth businesses, career businesses, health and Benefits Delivery & Outsourcing business.
The Zacks Consensus Estimate for revenues is pegged at $2.2 billion, indicating an increase of 1.7% from the year-ago quarter.
Insurance Consulting and Technology’s organic revenues are expected to have benefited from favorable timing of software sales and increased advisory work.
In the first quarter, the wealth businesses are likely to have gained from higher levels of project work across all regions, actuarial valuation activity, new administration clients in North America and a combination of regulatory and settlement work in Great Britain. The upside is likely to be partially offset by decline in Investments business due to headwinds from the negative impact of capital market performance received in the prior year.
Career businesses, comprising Work & Rewards and Employee Experience businesses are likely to have been driven by strong client demand for talent and compensation products, advisory services, survey offerings, compensation benchmarking products and project activity. Increased reward-based advisory services as well as expanded sales of compensation benchmarking surveys are also likely to have added to the upside.
Health revenues in the first quarter are likely to have benefited from portfolio growth and new client appointments in Europe and international as well as increased project work in North America and continued expansion of local portfolios.
Growth in Benefits Delivery & Outsourcing is likely to have been driven by Medicare Advantage sales and its expanded client base, new project and client activity in Europe and North America, boosted by an improved client base and project work.
Expenses in the quarter to be reported are likely to have decreased because of lower depreciation and amortization. The downside is likely to have been partially offset by higher salaries and benefits, other operating expenses, restructuring costs and transaction and transformation costs. We expect investment income to be $1.9 billion.
Continued share buybacks are anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for earnings per share is pegged at $2.81, suggesting an increase of 5.6% from the year-ago reported figure. We expect the bottom line to be $2.67 per share for the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Willis Towers this time. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which is not the case here.
Earnings ESP: Willis Towers has an Earnings ESP of -1.93%. This is because the Most Accurate Estimate is pegged at $2.76, lower than the Zacks Consensus Estimate of $2.81. 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
Zacks Rank: Willis Towers carries a Zacks Rank of 3.
Stocks to Consider
Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Aon plc AON has an Earnings ESP of +0.80% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $5.26, indicating an increase of 8.9% from the year-ago reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
AON’s earnings beat estimates in three of the last four quarters, while missing in one.
RenaissanceRe Holdings Ltd. RNR has an Earnings ESP of +3.37% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $7.34, indicating an increase of 109.7% from the year-ago reported figure.
RNR’s earnings beat estimates in two of the last four quarters and missed in the other two.
Everest Re Group, Ltd. RE has an Earnings ESP of +3.43% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $12.01, indicating an increase of 16.4% from the year-ago reported figure.
RE’s earnings beat estimates in each of the last four trailing quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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