We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Willis Towers (WLTW) Q2 Earnings Deliver a Surprise?
Read MoreHide Full Article
We expect Willis Towers Watson plc to beat expectations when it reports second-quarter results on Aug 5 before market open.
Why a Likely Positive Surprise?
Our proven model shows that Willis Towers has the right combination of the two key ingredients to beat estimates.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.89%. This is because the Most Accurate estimate is pegged at $1.62, while the Zacks Consensus Estimate stands lower at $1.59. A positive ESP is a meaningful indicator of a likely positive earnings surprise for the company.
Zacks Rank: Willis Towers carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1, 2 or 3 have a significantly higher chance of beating on earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
What is Driving the Better-Than-Expected Earnings?
Strategic acquisitions (Miller and Gras Savoye in particular) are expected to boost the top line. Risk and Financial Services revenues are likely to remain soft in the to-be-reported quarter. However, geographic diversification should support overall growth. Fees and commissions will likely improve on strong organic growth across segments.
Free cash flow is also likely to improve in the second quarter.
Then again, we cannot ignore an expected rise in interest expense due to the issuance of debt. Operating expenses too are likely to increase. Moreover, Willis Towers may witness a decline in investment income owing to lower average interest rates.
Also, the company incurred restructuring costs due to its Operational Improvement Program. However, the company likely may have saved costs owing to the program.
With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, with a negative beat of 3.28%.
Here are some other companies from the finance sector that you may want to consider as these also have the right combination of elements to post an earnings beat this quarter:
Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is set to report second-quarter earnings results on Aug 4.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #2 (Buy). The company is slated to report second-quarter earnings results on Aug 10.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +1.4% and a Zacks Rank #2. The company is set to report second-quarter earnings results on Aug 9.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will Willis Towers (WLTW) Q2 Earnings Deliver a Surprise?
We expect Willis Towers Watson plc to beat expectations when it reports second-quarter results on Aug 5 before market open.
Why a Likely Positive Surprise?
Our proven model shows that Willis Towers has the right combination of the two key ingredients to beat estimates.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +1.89%. This is because the Most Accurate estimate is pegged at $1.62, while the Zacks Consensus Estimate stands lower at $1.59. A positive ESP is a meaningful indicator of a likely positive earnings surprise for the company.
Zacks Rank: Willis Towers carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank of #1, 2 or 3 have a significantly higher chance of beating on earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
What is Driving the Better-Than-Expected Earnings?
Strategic acquisitions (Miller and Gras Savoye in particular) are expected to boost the top line. Risk and Financial Services revenues are likely to remain soft in the to-be-reported quarter. However, geographic diversification should support overall growth. Fees and commissions will likely improve on strong organic growth across segments.
Free cash flow is also likely to improve in the second quarter.
Then again, we cannot ignore an expected rise in interest expense due to the issuance of debt. Operating expenses too are likely to increase. Moreover, Willis Towers may witness a decline in investment income owing to lower average interest rates.
Also, the company incurred restructuring costs due to its Operational Improvement Program. However, the company likely may have saved costs owing to the program.
With respect to the surprise trend, the company delivered positive surprises in two of the last four quarters, with a negative beat of 3.28%.
WILLIS TWRS WAT Price and EPS Surprise
WILLIS TWRS WAT Price and EPS Surprise | WILLIS TWRS WAT Quote
Other Stocks to Consider
Here are some other companies from the finance sector that you may want to consider as these also have the right combination of elements to post an earnings beat this quarter:
Manulife Financial Corporation (MFC - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3. The company is set to report second-quarter earnings results on Aug 4.
Sun Life Financial Inc. (SLF - Free Report) has an Earnings ESP of +1.47% and a Zacks Rank #2 (Buy). The company is slated to report second-quarter earnings results on Aug 10.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +1.4% and a Zacks Rank #2. The company is set to report second-quarter earnings results on Aug 9.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report>>