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Willis Towers Watson (NASDAQ:WTW) stock gained 1.5% in Tuesday morning trading after Citi analyst Michael Ward placed the stock on a 90-day upside catalyst watch as management has indicated they expect full-year margin expansion for the insurance broker’s Risk & broking division.
At a recent investor conference, Willis Towers (WTW) CEO Carl Hess said the R&B segment would generate margin expansion for FY2023 despite 270 basis points of annual deterioration in the first half of the year.
In a note to clients, Ward also noted management made plan that the drivers of the upside are not tied to ancillary items like book sales.
“During the first day of trading following the disclosure, the market seemingly ignored the commentary, with the stock dropping along with the rest of the insurance broker group. We believe WTW’s current double digit discount should position this upside to act as a positive catalyst in 2H23,” the analyst contended.
The SA Quant system and the average sell-side analyst both rate WTW as a Hold.
Separately, Ward reiterated his Buy rating on fellow insurance broker Brown & Brown (NYSE:BRO), saying recent commentary by management at an investor conference made him confident that it’s “well-positioned to maintain solid organic with a strong hit rate on M&A.”
BRO advanced 0.6% at the time of writing.
