Analyst Estimates: Here's What Brokers Think Of Willis Towers Watson Public Limited Company (NASDAQ:WTW) After Its Yearly Report

Willis Towers Watson Public Limited Company (NASDAQ:WTW) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to US$245 in the week after its latest annual results. Results were roughly in line with estimates, with revenues of US$8.9b and statutory earnings per share of US$8.98. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Willis Towers Watson

Taking into account the latest results, the most recent consensus for Willis Towers Watson from 16 analysts is for revenues of US$9.23b in 2023 which, if met, would be a reasonable 4.1% increase on its sales over the past 12 months. Per-share earnings are expected to grow 10% to US$10.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$9.19b and earnings per share (EPS) of US$11.59 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$262, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Willis Towers Watson at US$303 per share, while the most bearish prices it at US$228. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Willis Towers Watson's growth to accelerate, with the forecast 4.1% annualised growth to the end of 2023 ranking favourably alongside historical growth of 1.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Willis Towers Watson is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$262, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Willis Towers Watson going out to 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Willis Towers Watson that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.