Zacks Investment Research downgraded shares of Willis Group Holdings plc (WSH) from NEUTRAL to UNDERPERFORM on November 21, 2012, with a target price of $31.00.
We are downgrading Willis Group to Underperform from Neutral on the back of weak performance in the third quarter. Operating earnings in the quarter fell short of the Zacks Consensus Estimate as well as the year-ago results. Lower revenue coupled with higher expenses weighed on the performance. Top line also missed the expectation and was lower than the year ago numbers due to lower commissions and fees and lower investment income. Willis Group completed its operational review in 2011 and expects annualized savings of approximately $135 million. With $42 million spent on share buyback in the third quarter, It exhausted the $100 million authorization. Also, the acquisition of Attain Consulting is expected to enhance Willis Risk's employee benefits business. Besides, the company scores strongly with the rating agencies. However, the weakness in the US economy will remain a headwind and restrict any significant top-line growth in the company.
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