Shares of Willis Towers Watson Public Limited Company WTW have lost 21.4% year-to-date compared with the Zacks Insurance – Brokerage industry’s decline of 16.5%.
Slower growth in its Risk & Broking segment and organic revenue, as well as the lower growth guidance, are pushing the stock down. Investor concerns about future growth sustainability have also pressured valuation. However, WTW's strong market position in insurance brokerage and consulting, disciplined cost management, recurring fee-based revenue model, and robust cash flows position the company for long-term growth.
Shares of other insurers like Aon plc. AON Arthur J. Gallagher & Co. AJG and Brown & Brown, Inc. BRO have lost 7.7%, 17.9% and 27.3%, respectively, in the said time frame.
YTD Price Performance - WTW, AON, AJG, BRO, Industry & S&P 500
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WTW’s Valuation
Shares of Willis Towers Watson are trading at a discount compared with the Zacks industry. Its forward price-to-earnings multiple of 12.49X is lower than the industry average of 14.64X. It currently carries a Value Score of B.
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WTW's Average Target Price Suggests Upside
Based on short-term price targets offered by 20 analysts, the Zacks average price target is $334.85 per share. The average suggests a potential 29.7% upside from the last closing price.
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WTW’s Growth Projection Encourages
The Zacks Consensus Estimate for Willis Towers Watson's 2026 earnings per share (EPS) indicates a year-over-year increase of 14.3%. The consensus estimate for 2026 revenues is pegged at $10.5 billion, implying a year-over-year improvement of 8.2%.
The consensus estimate for 2027 EPS and revenues indicates an increase of 13.3% and 5.3%, respectively, from the corresponding 2026 estimates.
The insurer beat earnings estimates in three of the last four quarters and missed once, with an average of 4.1%
WTW’s Favorable Return on Equity
Willis Towers return on equity (ROE) of 21.5% for the trailing 12 months compares favorably with the industry’s 18.8%, reflecting the company’s efficiency in utilizing shareholders’ funds.
Factors Impacting WTW
Willis Towers’ growth strategy remains centered on sustainable revenue generation, disciplined expense management, automation initiatives and operating margin expansion. Growth in specialty insurance lines, including surety, credit risk solutions and M&A-related services, continues to support WTW's operations. WTW has also re-entered the reinsurance market through a Bain Capital joint venture, which is expected to be a roughly 30-cent headwind to adjusted EPS in 2026.
Margin improvement remains a key earnings driver for WTW. Ongoing investments in automation, AI solutions and process simplification continue to improve productivity and generate operating leverage. Management expects continued annual margin expansion over the coming years.
The company’s acquisition of Newfront adds a technology-enabled middle-market broker operating across both Health, Wealth & Career and Risk & Broking, aligning with WTW’s focus on specialization, innovation and efficiency. Management expects Newfront to contribute about $250 million of post-close revenue in 2026 with an adjusted EBITDA margin near 26%, though it is expected to be about 10 cents dilutive to adjusted EPS in 2026.
Rising healthcare costs and increasing benefit complexity are driving demand for WTW's health consulting, and the health segment revenue grew 6% during the first quarter of 2026. Management expects high-single-digit growth for 2026
Willis Towers' solid balance sheet and steady cash flow are expected to help the company engage in capital deployment for buybacks, dividend payouts, debt repayments, and acquisitions. The company returned $388 million to shareholders during the first quarter of 2026 through share repurchases and dividends and expects share repurchases of $1 billion or greater in 2026.
Risks for WTW
WTW's first-quarter organic revenue growth slowed due to project delays and softer market conditions. Prolonged weakness in organic growth could pressure revenue expansion and investor sentiment.
WTW continues to face risks from geopolitical tensions and economic uncertainty, particularly in international markets, which may delay client spending and consulting projects.
Unfavorable exchange-rate movements could also negatively impact earnings and operating results despite the company's hedging programs.
End Notes
Willis Towers boasts growth through AI initiatives, specialty insurance expansion, the Newfront acquisition, effective capital deployment and continued margin improvement. However, slower organic growth, geopolitical uncertainty, and foreign exchange volatility remain key risks.
Its solid growth projections, attractive valuation, dividend history and favorable ROE should continue to benefit Willis Towers over the long term. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).