Is Marsh & McLennan Stock Underperforming the S&P 500?
With a market cap of $84.4 billion, Marsh & McLennan Companies, Inc. (MRSH) is a global leader in risk, reinsurance and capital, people and investments, and management consulting. Operating across 130 countries, the company advises clients with the support of more than 95,000 colleagues.
Companies worth more than $10 billion are generally labeled as "large-cap" stocks and Marsh & McLennan fits this criterion perfectly. Marsh & McLennan helps clients build confidence and navigate complex business challenges through its expertise and global perspective.
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Shares of the New York-based company have declined 16% from its 52-week high of $207.82. MRSH stock has risen 6.3% over the past three months, outpacing the S&P 500 Index's ($SPX) 2.9% gain over the same time frame.
The stock has fallen 5.9% on a YTD basis, underperforming SPX's 11.6% increase. In the longer term, shares of the insurance broker have decreased 11.6% over the past 52 weeks, compared to the 15.7% return of the SPX over the same time frame.
Yet, MRSH stock has been trading above its 50-day and 200-day moving averages since June.
Marsh & McLennan has underperformed amid concerns over rising costs, including higher wages, talent retention expenses, and acquisition-related costs, which have pressured margins. The company has also faced cyclical weakness in property and casualty insurance pricing, while investors remain concerned about elevated leverage and higher interest expenses following acquisitions such as McGriff.
In comparison, rival Aon plc (AON) has lagged behind MRSH stock. AON stock has decreased 17.3% over the past 52 weeks and 16.1% on a YTD basis.
Despite the stock's underperformance relative to the SPX over the past year, analysts remain moderately optimistic on MRSH. The stock has a consensus rating of "Moderate Buy" from the 26 analysts covering it, and the mean price target of $203.91 is a premium of 16.8% to current levels.
