Willis Group Holdings
) reported fourth quarter adjusted earnings per share of $0.46, a
penny lower than the Zacks Consensus Estimate and 19.3% lower than
the year-ago earnings. The lower numbers resulted from lower
commissions and fees and investment income coupled with higher
expenses. The top line also lagged expectations and the year-ago
Willis Group completed its operational review in 2011 and expects
an incremental cost savings of approximately $55 million in 2012,
reaching annualized savings of approximately $135 million. However,
the weakness in the US economy will remain a headwind and restrict
any significant top-line growth in the company.
We retain our Underperform rating on Willis Group. Our six-month
target price of $31.00 equates to about 10.3x our earnings estimate
for 2012. This target price along with an annual dividend of $1.04
implies an expected negative return of about 8.7% over that period.
WILLIS GP HLDGS (
): Free Stock Analysis Report
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