Marsh gets boost from Citi analyst

Marsh & McLennan Cos. Inc. of New York has been upgraded by Citigroup Investment Research analyst Keith Walsh. The ratings on the company have been raised to “buy,” from “hold,” and he also raised his price target to $33 per share, from $30. New executives at the helm also have helped to boost the company’s ratings, particularly the January addition of Brian Duperreault, chief executive and president of the firm, he said. Matthew B. Bartley, executive vice president and finance chief of Marsh & McLennan, parted ways with the firm in June. Mr. Duperreault’s hiring, as well as that of Daniel Glaser, chief executive of insurance brokerage firm Marsh Inc. of New York, “have gone a long way to improving employee morale and [Wall] Street credibility,” Mr. Walsh said in his note to clients. The company is “in the early stages of being fixed,” as it recovers from its decline in 2007. Other factors behind the positive report include Marsh & McLennan’s margin expansion and a series of possible catalysts that could surprise Wall Street, including a formal restructuring program, an acquisition or larger share repurchase, enhanced earnings and cash flows, and possible asset sales, according to the note. Improvements in the first quarter, stemming from cutbacks of 150 employees and reduced discretionary spending, will aid the firm’s margin gains. Mr. Walsh predicts further slashes in staff over the next two years, as well as decreased pension expenses through the remaining three quarters. Citigroup Investment Research is the research unit of New York-based Citigroup Inc.