Is Willis Towers Watson Plc overvalued or undervalued?

As of 31 October 2024, the valuation grade for Willis Towers Watson Plc has moved from fair to risky, indicating a shift in perception regarding its market position. The company is currently considered overvalued based on its P/E ratio of 24, which is higher than the industry average of approximately 23.39. Additionally, the EV to EBITDA ratio stands at 11.34, further suggesting that the company may not be justified at its current price level.
In comparison with peers, Marsh & McLennan Cos., Inc. has a P/E of 27.15 and an EV to EBITDA of 16.39, while Aon Plc shows a P/E of 27.77 and an EV to EBITDA of 14.74, both of which are higher than Willis Towers Watson's metrics. The company's dividend yield of 4.34% and a strong ROCE of 32.19% are positive indicators; however, they do not sufficiently offset the concerns raised by its valuation ratios. Overall, the stock has underperformed relative to the S&P 500 in the year-to-date period, which reinforces the notion of it being overvalued.