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Marsh & McLennan Companies, Inc. MMC is set to report second-quarter 2022 results on Jul 21, before the opening bell.
The leading global insurance broker reported adjusted earnings of $2.30 per share in the first quarter, beating the Zacks Consensus Estimate of $2.13 on the back of robust contributions from its Risk and Insurance Services and Consulting segments. MMC registered significant growth across the board, which was partly offset by elevated costs.
Let’s see how things have shaped up before the second-quarter earnings announcement.
Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings per share of $1.86 suggests a 6.3% increase from the prior-year figure of $1.75. The earnings estimate witnessed no upward movement, but one downward revision in the past week. The consensus estimate of $5.3 billion for second-quarter revenues indicates a 6.3% increase from the year-ago reported figure.
Marsh & McLennan beat the consensus estimate for earnings in each of the prior four quarters, with the average being 10.5%. This is depicted in the graph below:
Marsh & McLennan Companies, Inc. Price and EPS Surprise
Marsh & McLennan Companies, Inc. price-eps-surprise | Marsh & McLennan Companies, Inc. Quote
Factors to Note
Marsh & McLennan’s second-quarter performance is likely to have benefitted from solid contributions from its Risk and Insurance Services and Consulting segments.
The Risk and Insurance Services segment is expected to have received a boost from strong revenues across the Marsh and Guy Carpenter units. New business growth and robust retention rates might have favored Marsh’s performance in the second quarter. Guy Carpenter’s results are expected to have profited from broad-based growth across geographies and specialties.
The Zacks Consensus Estimate for MMC’s Risk and Insurance Services segment operating income indicates a rise of 4.5% from the prior-year quarter’s reported figure.
MMC’s Consulting segment’s performance is likely to have gained from solid results in its Mercer and Oliver Wyman units. Mercer is likely to have been driven by an improvement in the global economy, solid investment management growth and a rise in defined benefits. Oliver Wyman, on the other hand, is likely to have received a boost from strong demand across most geographies and practices in the quarter under review.
The Zacks Consensus Estimate for the Consulting segment’s operating income indicates 8.1% growth from the prior-year quarter’s tally. This is likely to have positioned Marsh & McLennan for 6.3% year-over-year growth in the bottom line for the second quarter.
However, higher expenses incurred for strategic hiring and constant investments to drive business might have been a drag. The Zacks Consensus Estimate for revenue-interest income indicates a 17% fall from the year-ago level. Moreover, the consensus mark for investment income signals a 43.8% year-over-year decline. This makes an earnings beat uncertain for Marsh & McLennan.
Our proven model does not conclusively predict 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 chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -1.30%. The Most Accurate Estimate currently stands at $1.84 per share, lower than the Zacks Consensus Estimate of $1.86.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Marsh & McLennan currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for Marsh & McLennan, here are some companies from the broader Financespace that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
CVB Financial Corp. CVBF has an Earnings ESP of +5.82% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CVB Financial’s bottom line for the to-be-reported quarter is pegged at 38 cents per share. CVBF witnessed one upward estimate revision in the past 30 days against none in the opposite direction.
American Express Company AXP has an Earnings ESP of +0.31% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for American Express’ top line for the to-be-reported quarter is pegged at $12.4 billion, implying a 21.2% improvement from the year-ago figure. AXP beat earnings estimates in each of the past four quarters, with an average of 33.3%.
CME Group Inc. CME has an Earnings ESP of +0.32% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for CME Group’s bottom line for the to-be-reported quarter indicates a 17.1% jump from a year ago. The consensus mark for CME’s top line indicates a 5.2% year-over-year increase.
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CME Group Inc. (CME) : Free Stock Analysis Report
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Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
CVB Financial Corporation (CVBF) : Free Stock Analysis Report
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