On Friday, BofA Securities adjusted its outlook on shares of Marsh & McLennan (NYSE:MMC), reducing the price target to $223 from the previous $228 while sustaining a Neutral rating on the stock. The adjustment follows Marsh & McLennan's reported 9% organic growth in the first quarter of 2024, which surpasses the company's full-year guidance that suggested mid-single-digit growth or better.
The company's first-quarter performance showed a notable increase compared to the 7% growth observed in the fourth quarter of 2023. This growth was driven by both of Marsh & McLennan's segments: Risk and Insurance Services (RIS) and Consulting. RIS reported a 9% increase, exceeding estimates of 6%, while Consulting achieved a 9% rise, surpassing the estimated 5%.
In light of these results, BofA Securities has revised its forward organic growth forecasts for Marsh & McLennan. The revisions account for the robust first-quarter strength, a slower deceleration in nominal GDP growth, and an anticipated higher fiduciary income revenue due to a more gradual decline in short-term interest rates. BofA Securities now projects a 6% organic growth for Marsh & McLennan in 2024, aligning with the company's own guidance.
The firm acknowledges the potential for its forecast to be exceeded if the first-quarter results continue to outperform throughout the year. The positive first-quarter figures indicate a strong start for Marsh & McLennan in 2024, setting an optimistic tone for the company's financial performance moving forward.
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