Arthur J. Gallagher upgraded to Outperform from Market Perform at BMO Capital

BMO Capital analyst Michael Zaremski upgraded Arthur J. Gallagher (AJG) to Outperform from Market Perform with a price target of $278, up from $275. The shares are pricing in a slight organic growth miss and not fully appreciating Arthur’s AI-productivity benefits thar are set to accrue to shareholders over the next 12-24 months, the analyst tells investors in a research note. BMO believes the company’s productivity upside offsets the risks associated with the longer-term uncertainty as to whether business owners will seek to use AI to perform some of the consultative functions currently performed by their insurance brokers.