Marsh & McLennan (MMC) Unit Boosts Aviation Business With SeaTec
Marsh & McLennan Companies, Inc.’s MMC business, Oliver Wyman, recently agreed to buy SeaTec Consulting Inc., which caters to aerospace, defense, aviation and transportation industries. SeaTec’s business ranges from aerospace and digital expertise to consulting in these industries. The move is expected to boost Oliver Wyman’s position in the aviation space. The buyout is expected to close by the first quarter of 2024.
This move bodes well for Oliver Wyman’s COVAK division, which is focused on aviation. With the help of SeaTec’s industry experience and knowledge, MMC can enhance its offerings to clients by delivering unmatched solutions. SeaTec provides consulting services on maintenance records, aircraft acquisitions, and replacement of MRO IT systems, among others. Oliver Wyman will be able to make a favorable impact on cost, operations, safety and reliability for defense, transportation, and aviation industries.
Per Oliver Wyman’s Global Fleet and MRO Market Forecast 2023-2033 report, the aviation market is expected to grow 33% to 36,000 aircraft by 2033. However, supply-chain constraints, shortage of labor and new environmental rules are expected to drive the industry to pursue innovative solutions to combat these issues. Oliver Wyman’s COVAK business is expected to benefit from this trend. This is an opportune time to enhance its capabilities organically and through acquisitions. MMC also acquired Avascent in November 2022 to boost its presence in aviation consulting.
Oliver Wyman is a faster-growing business for MMC. It expects this business to register growth in mid-to-high-single digits over the long term. We expect Oliver Wyman’s revenues to grow at a three-year CAGR of 7.9% by 2025.
Price Performance
Shares of Marsh & McLennan have soared 16.7% in the past year compared with the industry’s 13.8% rise.
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Zacks Rank & Other Key Picks
Marsh & McLennan currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Finance space are Assurant, Inc. AIZ, Brown & Brown, Inc. BRO and Arthur J. Gallagher & Co. AJG. While Assurant currently sports a Zacks Rank #1 (Strong Buy), Brown & Brown and Arthur J. Gallagher carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Assurant’s current-year earnings indicates a 30.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 42.4%. Also, the consensus mark for AIZ’s 2023 revenues suggests 5.4% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $2.76 per share, which indicates 21.1% year-over-year growth. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 12.3%. Also, the consensus mark for BRO’s 2023 revenues suggests 17.9% year-over-year growth.
The consensus mark for Arthur J. Gallagher’s current-year earnings indicates a 13.6% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 2.2%. Furthermore, the consensus estimate for AJG’s 2023 revenues suggests 18.3% year-over-year growth.
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