Value
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 8.3 |
| EV/EBITDA | 4.0 |
| Fwd P/E | 8.1 |
| PEG | 4.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 14.7x
- ▸PEG: 1.60
MRSH · Why this verdict
Why Marsh (MRSH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A high-quality insurance brokerage franchise with excellent cash conversion and an unbroken four-quarter earnings beat streak is navigating a confirmed near-term price downtrend with heavy revenue concentration in a single business segment—warranting a patient, watch-and-wait stance while the technical setup stabilizes.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Approximately 64% of revenue flows from a single business segment, and within that segment roughly 54% derives from a single sub-unit—two compounding layers of concentration that create meaningful vulnerability if market conditions for that specific business line deteriorate. Bear case | Revenue from the primary concentrated segment declines below 55% of total revenue as other business lines grow in proportion. | →Stable |
| CounterHigh segment concentration in a stable, recurring-fee advisory business may reflect deliberate focus on the highest-margin activities rather than structural fragility, especially if long-term client retention rates are high and the segment is structurally growing. | ||
Return on equity of 28% and free cash flow exceeding reported net income by approximately 27% indicate a capital-efficient business generating real cash well above accounting earnings—a sign of fundamental franchise strength that tends to sustain premium valuations over full cycles. Quality breakdown | Free cash flow conversion stays above 110% of net income and operating margin remains at or above current levels over the next 12 months. | →Stable |
| CounterA leverage penalty from a debt-to-equity ratio above 1.0 and a dividend payout flagged as potentially unsafe limit the capital available for reinvestment, which could constrain the compounding capacity that the high return on equity implies. | ||
The stock trades below its long-term moving average on a negatively sloping trajectory of approximately negative 3.2% per 30 days—a confirmed downtrend—indicating that near-term selling pressure dominates and discourages new entry until the technical picture stabilizes. Momentum breakdown | Price recovers above the 200-day moving average and the 30-day moving average slope turns positive for 2 consecutive months, confirming a sustained reversal. | →Stable |
| CounterAn improving MACD and RSI near 57 suggest early-stage stabilization; the downtrend may be approaching exhaustion if the improving short-term momentum signals are absorbed into a sustained recovery. | ||
Four consecutive quarters of beating analyst estimates—with beat magnitudes ranging from roughly 2% to 7%—shows a management team that consistently delivers against expectations, a track record that typically sustains analyst support and limits downside earnings surprises. Earnings | The earnings beat streak extends to six or more consecutive quarters. | →Stable |
| CounterAverage positive surprises of approximately 4% are narrow, leaving little cushion if the operating environment softens; a single in-line or miss quarter in the current bearish technical setup could disproportionately reset analyst sentiment. | ||
Approximately 64% of revenue flows from a single business segment, and within that segment roughly 54% derives from a single sub-unit—two compounding layers of concentration that create meaningful vulnerability if market conditions for that specific business line deteriorate.
→StableBear case
- Expectation
- Revenue from the primary concentrated segment declines below 55% of total revenue as other business lines grow in proportion.
CounterHigh segment concentration in a stable, recurring-fee advisory business may reflect deliberate focus on the highest-margin activities rather than structural fragility, especially if long-term client retention rates are high and the segment is structurally growing.
Return on equity of 28% and free cash flow exceeding reported net income by approximately 27% indicate a capital-efficient business generating real cash well above accounting earnings—a sign of fundamental franchise strength that tends to sustain premium valuations over full cycles.
→StableQuality breakdown
- Expectation
- Free cash flow conversion stays above 110% of net income and operating margin remains at or above current levels over the next 12 months.
CounterA leverage penalty from a debt-to-equity ratio above 1.0 and a dividend payout flagged as potentially unsafe limit the capital available for reinvestment, which could constrain the compounding capacity that the high return on equity implies.
The stock trades below its long-term moving average on a negatively sloping trajectory of approximately negative 3.2% per 30 days—a confirmed downtrend—indicating that near-term selling pressure dominates and discourages new entry until the technical picture stabilizes.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average and the 30-day moving average slope turns positive for 2 consecutive months, confirming a sustained reversal.
CounterAn improving MACD and RSI near 57 suggest early-stage stabilization; the downtrend may be approaching exhaustion if the improving short-term momentum signals are absorbed into a sustained recovery.
Four consecutive quarters of beating analyst estimates—with beat magnitudes ranging from roughly 2% to 7%—shows a management team that consistently delivers against expectations, a track record that typically sustains analyst support and limits downside earnings surprises.
→StableEarnings
- Expectation
- The earnings beat streak extends to six or more consecutive quarters.
CounterAverage positive surprises of approximately 4% are narrow, leaving little cushion if the operating environment softens; a single in-line or miss quarter in the current bearish technical setup could disproportionately reset analyst sentiment.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.2 |
| ROA | 4.8 |
| Gross margin | 4.8 |
| Op margin | 9.7 |
| Net margin | 7.1 |
| Current ratio | 4.3 |
| FCF quality | 9.2 |
| Moat | 6.1 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 28%
- ▸Excellent cash conversion: 127% FCF/NI
Growth
2.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 0.0 |
Momentum
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.7 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.2%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.8 |
| erm sentiment | 5.6 |
- ▸Analyst upside: 21%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $2,693,442 (0.003% of mkt cap)
Peer rank
3.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.1 |
| quality rank | 5.6 |
| growth rank | 2.7 |
Technical
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 3.8 |
| 52w position | 4.3 |
Risk (lower is worse)
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 8.3 |
| volatility | 6.9 |
| put call | 10.0 |
| implied vol | 6.9 |
| max pain risk | 7.0 |
| beta | 9.3 |
| debt equity | 4.0 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.5 |
| dividend safety | 6.5 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 217.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:5.6>=5.5
- ASYMMETRY:1.7>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.6>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.73
Upside
+8.8%
Downside
5.1%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 56
EdgeCATALYST — Earnings in 25d with 4/4 beat streak
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.7) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 1.73 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.7, Sentiment at 7.1, and Quality at 6.9; the weakest are Growth at 2.2, Peer rank at 3.6, and Technical at 4.0. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 1.73 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Return on equity of 28% and free cash flow exceeding reported net income by approximately 27% indicate a capital-efficient business generating real cash well above accounting earnings—a sign of fundamental franchise strength that tends to sustain premium valuations over full cycles.
Trip ifFree cash flow as a percentage of net income falls below 100% for 2 consecutive quarters.
- P2The stock trades below its long-term moving average on a negatively sloping trajectory of approximately negative 3.2% per 30 days—a confirmed downtrend—indicating that near-term selling pressure dominates and discourages new entry until the technical picture stabilizes.
Trip ifPrice closes above $179.87 and sustains above that level for 2 consecutive weeks, confirming the downtrend has reversed.
- P3Approximately 64% of revenue flows from a single business segment, and within that segment roughly 54% derives from a single sub-unit—two compounding layers of concentration that create meaningful vulnerability if market conditions for that specific business line deteriorate.
Trip ifPrimary revenue segment falls below 55% of total company revenue.
- P4Four consecutive quarters of beating analyst estimates—with beat magnitudes ranging from roughly 2% to 7%—shows a management team that consistently delivers against expectations, a track record that typically sustains analyst support and limits downside earnings surprises.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.