Company Reports

Marsh McLennan produced another strong quarter, as the company is still benefiting from multiple tailwinds. This drove 9% year-over-year organic growth for the company during the first quarter, well above our long-term growth expectations. While we are impressed with the firm's ability to extend the strong growth it has seen of late, we expect a reversion to the more modest levels of growth the company has enjoyed historically. We will maintain our $167 per share fair value estimate for the narrow-moat firm and see shares as overvalued, as we think the market is overly focused on the company's recent performance.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Marsh McLennan produced a solid fourth quarter, but we see signs that growth may be normalizing. The company has been riding a number of tailwinds recently, and some of these benefits are likely starting to taper off. We will maintain our $157 fair value estimate for the narrow-moat company and see the shares as overvalued.

Narrow-moat Marsh McLennan produced another strong quarter with overall revenue up 13% year over year, or 10% on an organic basis. The company also continues to see strong margin improvement. We will maintain our $157 fair value estimate, and we see shares as a bit overvalued. While we appreciate the company's near-term prospects, we think Marsh McLennan will eventually return to the low- to mid-single-digit growth it has generated historically. The market, in our view, is overly focused on the company's current path.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

Narrow-moat Marsh McLennan continued to enjoy strong growth in the second quarter, with revenue up 11% year over year on an organic basis. Both sides of the business are performing well, but brokerage was the biggest driver in the quarter. We appreciate the tailwind Marsh McLennan is currently enjoying but historically the company has produced only modest growth, and we think a return to more normalized growth is inevitable. We think the market is overly focused on near-term prospects, and that the shares are overvalued as a result. While Marsh McLennan is tracking a bit ahead of our full-year expectations, the difference is not enough to materially affect our $145 fair value estimate, which we will maintain.

Narrow-moat Marsh McLennan delivered a good start to the year, with relatively strong growth and margin improvement. Overall revenue was up 7% year over year or 9% on an underlying basis. We are pleased to see the company extend its run of outsized growth but believe that a return to more modest growth is coming. We will maintain our $145 fair value estimate. We see shares as modestly overvalued and believe the market is overly focused on recent growth rates.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus and a hard insurance market have created some recent ups and downs.

While reported results were negatively affected by the stronger dollar, Marsh McLennan saw relatively strong underlying growth across both parts of its business. We appreciate the near-term tailwinds the company is enjoying but believe reversion to the more modest growth it has enjoyed historically is inevitable. We will maintain our $137 fair value estimate for the narrow-moat company. We see the shares as overvalued and believe the market is overly focused on recent performance.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus has created some near-term ups and downs.

Marsh McLennan continued to report strong results in the third quarter. Underlying year-over-year revenue growth of 8% did decelerate a bit from recent results, but remains well above the company's historic growth levels, with both sides of the business contributing to the result. We appreciate the near-term tailwinds the company is enjoying but continue to expect much more modest growth longer term. We will maintain our $130 per share fair value estimate and narrow moat rating.

Marsh & McLennan announced that John Doyle will take over as chief executive when current CEO Dan Glaser retires at the end of the year. Glaser has served as CEO of the company for about a decade. Doyle currently serves as the firm's COO, and prior to that, served as president and CEO of the Marsh unit. He has worked in insurance and insurance brokerage for over 30 years, beginning his career at AIG. Doyle has largely followed the same career path as Glaser did prior to his becoming CEO. While we will have to wait to hear Doyle's specific plans for the company, we don't foresee any major shifts in strategy, given that Marsh & McClennan is sticking with an insider. We will maintain our $130 per share fair value estimate and narrow moat rating for the firm.

Narrow-moat Marsh McLennan continued to enjoy strong growth on both sides of its business in the second quarter. Overall revenue growth excluding acquisitions and currency effects came in at 10%, in line with the last quarter. We appreciate the near-term tailwinds the company is enjoying but continue to expect much more modest growth longer term and believe the shares are overvalued at this point. We will maintain our $130 per share fair value estimate.

Marsh McLennan continued to post strong growth in the first quarter, as the company is being aided by tailwinds across its business. Overall revenue grew 10% year over year excluding currency impacts and acquisitions. Historically, however, the company has achieved only modest organic growth. This is our expectation over the long term, and management’s guidance suggests growth will start to slow as the company moves through the year. We will maintain our $130 fair value estimate and narrow moat rating. While we think Marsh McLennan is an attractive narrow-moat franchise, we believe the current market price is overly tied to current growth levels.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus has created some near-term ups and downs.

Marsh McLennan had a banner year, with the best organic growth the company has seen in over two decades. That strength continued in the fourth quarter, with the company achieving overall year-over-year growth of 10%, excluding currency impacts and acquisitions. However, the company has achieved only modest organic growth historically, and this is our expectation over the long term, although we think growth in 2022 will remain relatively strong compared with historical levels. We will maintain our $125 fair value estimate and narrow moat rating. While we think Marsh McLennan is an attractive franchise, we believe the current market price reflects an overly optimistic view of its long-term growth prospects.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus has created some near-term ups and downs.

We view Marsh McLennan as something of a tollbooth business. Its leading position in the brokerage industry would be difficult to displace, and its sticky customer relationships allow it to benefit from a relatively stable level of insurance transactions, although it does have some exposure to the insurance pricing cycle. We think Marsh McLennan’s long-term future will largely resemble its past, with moderate growth and attractive profitability, although the coronavirus has created some near-term ups and downs.

Marsh McLennan’s unusually strong growth continued in the third quarter. The narrow-moat company has benefited this year from higher insurance market pricing and the macroeconomic rebound, and these tailwinds have combined with easy comparisons to produce outsized growth. However, the company has achieved only modest organic growth historically, and this is our expectation over the long term. The company is tracking ahead of our expectations this year, and we expect to increase our $112 fair value estimate by about 5%, but we continue to believe the shares are materially overvalued.

Marsh & McLennan reported unusually strong growth in the second quarter, benefiting from both strong insurance market pricing and the bounceback in the economy. We think near-term tailwinds and easy comparisons will drive outsize growth for the company this year. But we’d caution that modest and stable organic growth has been the norm historically and is our expectation over the long term. We will maintain our $112 fair value estimate and narrow moat rating.