Zacks_Analysts' Blog : Willis Expands in Italy - Analyst Blog

Willis Italy, part of  Willis Group Holdings (WSH) acquired Broking Italia SRL. However, terms of the deals were not announced.

Broking Italia specializes in Employee Benefits and pension programs. The acquisition made by the company will further augment its presence in Italy, aiding Willis to write more business going forward, thereby aiding top-line growth.

On the flip side, the clients of Broking Italia will have an exposure to extensive global network.

The company reported a strong third quarter on the back of higher commissions and fees. Commissions and fees reported an increase of 4% year over year in the third quarter.

Willis Group expects to deliver 2011 adjusted earnings in the band of $2.70 and $2.80 per share and reach 2011 adjusted operating margin in the mid-22% range.

The Zacks Consensus Estimate for fourth-quarter 2011 is 48 cents per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, $2.77 per share and $3.06 per share.

However, headwind from The Loan Protector business that is expected to weigh on North American results, accelerating expenses and declining investment income keep us Underperform on Willis. The quantitative Zacks #5 Rank (short-term Strong Sell rating) for the company indicates downward pressure on the stock over the near term.

Headquartered in London, the United Kingdom, Willis Group Holdings plc and its subsidiaries provide a broad range of insurance brokerage, reinsurance and risk management consulting services to its worldwide clients, both directly and through its associates. The company competes with Aon Corporation (AON), Arthur J Gallagher & Co. (AJG) and Marsh & McLennan Companies Inc. (MMC).