Marsh & McLennan Q3 Earnings: Can NYSE:MMC Hit Its $0.72 EPS Target?

in EARNINGS/INVESTING IDEAS by

Marsh & McLennan Companies, Inc. (NYSE:MMC) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $0.72/share on revenue of $3.842 billion. The consensus earnings per share (EPS) of $0.72/share is based on a poll of 17 analysts and represents a decline in eps of −6.0% over the same quarter last year, when the company reported earnings of $0.77/share.

The revenue forecast of $3.842 billion based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −3.2%. Last year the company reported $3.968 billion in revenue for the quarter.

Expected to report EPS contraction of −6.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,841.88 $3,968.00 −3.2%
EPS $0.72 $0.77 −6.0%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Marsh & McLennan Companies, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.13 $1.32 16.4% Beat
Q1, 2020 $1.56 $1.64 5.0% Beat
Q4, 2019 $1.18 $1.19 0.7% Beat
Q3, 2019 $0.70 $0.77 9.8% Beat
Q2, 2019 $1.13 $1.18 4.5% Beat
Q1, 2019 $1.44 $1.52 5.3% Beat
Q4, 2018 $1.04 $1.09 4.3% Beat
Q3, 2018 $0.74 $0.78 4.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $115.58 $116.60 0.9% Increase
April 30, 2020 $94.62 $97.10 2.6% Increase
January 30, 2020 $115.94 $111.86 −3.5% Decline
October 29, 2019 $97.87 $103.53 5.8% Increase

Fundamentals And Technical Analysis

Marsh & McLennan Companies, Inc. is currently trading at $111.09/share, down −2.3% for the day. The company is trading at approximately 91.8% of its 52-week high of $120.97/share. The company’s stock price is down −4.7% since the last earnings report and down −1.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 36.42 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MMC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 27.86 and a forward P/E multiple of 23.46.

Marsh & McLennan Companies, Inc.’s current share price also implies a price-to-book (P/B) multiple of 6.84. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $111.09
P/E Ratio 27.9x
P/E Ratio (Fwd) 23.5x
PEG Ratio 0.8
Total Debt / Total Capital 21.1%
Levered Free Cash Flow $2.238 billion
EV / EBITDA 15.2x

Finbox

Marsh & McLennan Companies, Inc. is a large-cap stock with a market capitalization of $56.27 billion and a total enterprise value of $70.16 billion. The company operates in the Financials sector and the Insurance industry.

Marsh & McLennan Companies, Inc., a professional services company, provides advice and solutions to clients in the areas of risk, strategy, and people worldwide. It operates in two segments, Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment offers risk management services, such as risk advice, risk transfer, and risk control and mitigation solutions, as well as insurance and reinsurance broking, catastrophe and financial modeling, and related advisory services; and insurance program management services. This segment serves businesses, public entities, insurance companies, associations, professional services organizations, and private clients. The Consulting segment provides health, wealth, and career services and products; and specialized management, as well as economic and brand consulting services. The company was founded in 1871 and is headquartered in New York, New York.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.