Story updated at 9:55 a.m. to reflect market activity.
Shares of Marsh & McLennan fell 0.7% to $49.28 in morning trading.
The analyst firm also raised its estimates for the insurance provider. Both the estimate and price cut increases come after Marsh & McLennan's company update at its investor day.
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Separately, TheStreet Ratings team rates MARSH & MCLENNAN COS as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MARSH & MCLENNAN COS (MMC) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, good cash flow from operations, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 19.1%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MARSH & MCLENNAN COS has improved earnings per share by 14.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MARSH & MCLENNAN COS increased its bottom line by earning $2.41 versus $2.13 in the prior year. This year, the market expects an improvement in earnings ($2.80 versus $2.41).
- Net operating cash flow has increased to $766.00 million or 33.91% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.44%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.58% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Despite currently having a low debt-to-equity ratio of 0.37, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.47 is sturdy.
- You can view the full analysis from the report here: MMC Ratings Report