Marsh & McLennan’s logo on its New York headquarters. The insurance brokerage and consulting giant’s stock has stumbled lately, even as its financial results remain solid. Shares of Marsh & McLennan Companies (ticker: MMC) have fallen about 17% from their all-time high in April, including a 12.5% slide over the past three months. The stock is down roughly 10% in the last year, notably underperforming the Dow Jones Industrial Average’s ~9% gain in that period. This recent weakness raises a question familiar to Wall Street: have the company’s fundamentals changed, or is the market offering a buying opportunity?

Stock Slump vs. Business Fundamentals

The irony for Marsh & McLennan is that its business has been humming along even as its stock slumps. In the second quarter of 2025, the company posted better-than-expected earnings. Revenue surged 12.1% year-over-year to about $7.0 billion, and adjusted earnings per share jumped 11% to $2.72. These gains were boosted by acquisitions, but even on an organic basis (excluding deal-driven growth), Marsh delivered 4% revenue growth in the quarter. That underlying growth did slow from about 6% a year earlier, reflecting some macroeconomic headwinds, yet it still underscores a fundamentally expanding business. CEO John Doyle lauded the firm’s “continued momentum” and “consistent execution in a complex and dynamic environment” – hardly signals of a company in trouble.

Why, then, the stock malaise? Part of the answer lies in expectations and the broader financial landscape. Marsh & McLennan’s 4% organic growth, while steady, is a step down from the brisk pace seen in 2024. Investors are also grappling with concerns that the tailwinds which fueled insurance brokers in recent years – like rising insurance premiums – are waning. In an earnings call, Doyle acknowledged “declining P&C pricing” (property and casualty insurance rates coming off their peaks) and client caution amid economic uncertainty as factors weighing on results. Notably, Marsh’s stock barely budged on its strong Q2 report, suggesting that solid results were already baked into Wall Street’s outlook. With the Federal Reserve’s interest rate regime making investors more selective, even a steady performer like Marsh can fall out of favor when growth appears to moderate.

Secular Growth Drivers: Intact or Eroding?

A crucial consideration for would-be buyers is whether Marsh & McLennan’s secular growth drivers remain intact. The company’s long-term narrative has been built on rising complexity in the world of risk and human capital – trends that play to Marsh’s strengths. In fact, industry analysts highlight factors like increased global risk awareness (from cyber threats to climate-related disasters) and the growing need for expert advice amid “macro complexity” as ongoing drivers of demand. Marsh’s businesses – spanning insurance brokerage (Marsh and reinsurance arm Guy Carpenter) and consulting (Mercer and Oliver Wyman) – are deeply woven into these secular themes.

So far, there’s little evidence that these underlying trends have fundamentally eroded. Companies still face ever-evolving risks and look to brokers for guidance on insurance coverage, risk mitigation, and navigating issues like “natural catastrophe losses, cyber [attacks], supply chain [disruptions], geopolitics, and technology,” to quote the company’s own growth thesis. Marsh’s latest numbers reflect this enduring demand: its risk and insurance segment posted 5% organic growth at Marsh (the insurance brokerage unit) and similarly 5% at Guy Carpenter in Q2. In Europe and the Middle East, Marsh’s business grew a healthy 8% organically, showing that risk advisory needs are robust abroad. Mercer, the firm’s HR consulting arm, is benefiting from a “middle market” push and specialties like outsourced CIO services for pension funds – again tapping into long-term trends as organizations seek external expertise for complex challenges.

That said, secular tailwinds don’t always blow in a straight line. Marsh & McLennan’s consulting operations have seen pockets of softness recently. Within Mercer, for example, the career consulting unit (which advises on talent, compensation and the like) saw revenues decline 5% organically in Q2 as hiring and HR initiatives cooled in a slower economy. Even the insurance side is not immune to cycles: a multi-year boom in insurance pricing (which boosts brokers’ commission revenue) is leveling off, and Marsh noted that about “15%–20%” of its revenue is exposed to more economically sensitive areas that are feeling a pinch. The reassuring news is that roughly 80% of Marsh’s portfolio is more “defensive and resilient,” in Doyle’s words, with core risk services and essential benefits consulting likely to be needed through thick and thin. In short, Marsh’s secular story – that a riskier, more complex world demands more advice and insurance intermediation – appears intact. But the company is navigating a phase where cyclical drags are masking some of those long-run drivers.

The Global Insurance Broker Industry: Should you bother?

When Baltimore’s Key Bridge crumbled into the Patapsco River, three rival brokers choreographed billions in coverage before sunrise—proof that in a poly-crisis world, the power brokers aren’t the insurers or the reinsurers, but the middlemen who now command a US$7 trillion sea of global risk.

QMoat - Quality WinsQMoat

Opportunities and Risks

Looking ahead, Marsh & McLennan still has plenty of avenues for growth. For one, the company hasn’t been shy about acquisitions to augment its portfolio – last year’s “active year of acquisitions” helped boost revenue, and Marsh can continue to tuck in smaller brokers or specialty consultancies to expand its reach. Geographically, there’s room to grow in emerging markets where insurance penetration is rising and corporations are seeking more sophisticated risk management. Marsh is also pushing into high-growth niches: the firm cites areas like data & analytics and digital solutions as key priorities for innovation. Successfully monetizing data (for instance, using the troves of insurance claims data to advise clients) could become a bigger revenue stream. The collaboration between its businesses – say, using Mercer’s relationships to cross-sell Marsh insurance services – is another upside lever the company is explicitly trying to pull. These are the sort of blocking and tackling moves that might keep Marsh’s earnings climbing at a mid-single-digit clip organically, even if the broader economy stays tepid.

On the flip side, risks abound. A significant economic downturn would test the “resilient” label on Marsh’s business mix – companies might curtail insurance coverage, defer consulting projects, or pressure brokers on pricing. Competition is another perennial risk: Marsh & McLennan is the world’s largest insurance broker, but rivals like Aon and Willis Towers Watson, and a host of smaller players, are all vying for the same clients. Maintaining share often means keeping pricing competitive, which could squeeze margins. Thus far Marsh has managed to expand its operating margins – adjusted operating income jumped 14% in Q2, outpacing revenue growth – thanks to efficiency efforts and pricing power. But holding margins in an inflationary environment (especially with talent costs rising in the consulting sector) will be a challenge. Another potential pitfall is the insurance cycle: if we are indeed past the peak of the hard market, brokers could face a few years of slower growth in premium-based commissions. Marsh’s CEO has also flagged the issue of “social inflation” – the surge in U.S. litigation and giant legal awards – which is driving up clients’ insurance costs. While that might increase demand for advice, it could also deter some clients from buying as much coverage, in turn limiting brokerage revenue. In essence, Marsh & McLennan must execute through a more challenging phase: capturing the opportunities from a changing risk landscape, while steering around the shoals of economic and industry downturns.

Valuation and Outlook

With the stock in a funk, Marsh & McLennan’s valuation has become attractive again. The shares trade just below $200, equivalent to roughly 21 times trailing earnings. That isn’t dirt cheap, but for a global category leader with a steady business, this is attractive. Marsh does offer a growing dividend (currently yielding about 1.8% after a 10% hike this year) and continues to return cash via share buybacks. The company’s profitability is enviable – it churns out a 16% net profit margin and over 30% return on equity – which helps justify a premium valuation. Long-term shareholders have been rewarded, the total return of the stock since 2010 currently stands at 17.3% p.a.

Conclusion

Marsh’s recent weakness appears linked more to short-term macro and market sentiment than any fundamental unraveling. The core franchise – helping clients manage risk and people – is arguably more vital than ever, and its earnings stream is resilient. Barring a severe recession or an unforeseen disruption to the insurance brokerage model, the company is positioned to keep churning out mid-single-digit growth, supplemented by savvy acquisitions and share buybacks. That may not be a get-rich-quick recipe, but it’s the kind of dependable profile many long-term investors prize. For now, the stock’s doldrums have made its valuation attractive for fundamentally minded buyers. In classic Wall Street Journal fashion, Marsh & McLennan offers a solid business at a reasonable price. Its our stock of the month for September 2025.