Arthur J Gallagher & Co (AJG)
NYSE:AJG
Top Page
Arthur J Gallagher & Co
(NYSE:AJG)
Select Model
Select Model
Rating:69Neutral
Price Target:
$239.00
▲(15.40% Upside)
Action:DowngradedDate:02/20/26
AJG scores well on fundamentals and management’s outlook (durable growth, margin expansion guidance, and continued M&A/synergy execution), but the overall score is held back by weak technicals (below key moving averages with negative momentum) and a premium valuation (P/E ~37 with a modest yield).
Positive Factors
Multi-year revenue growth & cash conversion
Gallagher has delivered durable top-line expansion and high-quality earnings: revenue compounded strongly 2020–2025 and free cash flow conversion remains near ~0.87–0.95x. That persistent cash conversion supports reinvestment, dividends and strategic optionality over the next several quarters.
Negative Factors
High absolute debt despite improved leverage
Although leverage ratios improved, the company carries a large absolute debt burden that has grown versus earlier years. Elevated nominal debt can constrain flexibility if earnings soften or rates remain higher, increasing interest exposure and limiting optionality for organic investment.
Read all positive and negative factors
Positive Factors
Negative Factors
Multi-year revenue growth & cash conversion
Gallagher has delivered durable top-line expansion and high-quality earnings: revenue compounded strongly 2020–2025 and free cash flow conversion remains near ~0.87–0.95x. That persistent cash conversion supports reinvestment, dividends and strategic optionality over the next several quarters.
Read all positive factors
Arthur J Gallagher & Co (AJG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$53.25B
Dividend Yield1.01%
Average Volume (3M)2.42M
Price to Earnings (P/E)45.1
Beta (1Y)0.46
Revenue Growth17.17%
EPS Growth19.12%
CountryUS
Employees72,000
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)2.38
Shares Outstanding257,100,000
10 Day Avg. Volume2,192,919
30 Day Avg. Volume2,422,887
Financial Highlights & Ratios
PEG Ratio-3.74
Price to Book (P/B)2.89
Price to Sales (P/S)4.83
P/FCF Ratio37.74
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue4.72
Enterprise Value/Gross Profit8.63
Enterprise Value/Ebitda17.99
Forecast
1Y Price Target
$278.44Price Target Upside34.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
EPS Forecast (FY)13.24
Revenue Forecast (FY)$16.82B
Arthur J Gallagher & Co Business Overview & Revenue Model
Company Description
Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, third-party claims settlement, and administration services in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, India, an...
How the Company Makes Money
Arthur J Gallagher & Co primarily generates revenue through commissions and fees earned from providing insurance brokerage services. The company acts as an intermediary between clients and insurance carriers, earning commissions based on the premi...
Arthur J Gallagher & Co Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue across different business segments, highlighting which areas are driving growth and where the company might need to improve or capitalize on emerging opportunities.
Analyzes revenue across different business segments, highlighting which areas are driving growth and where the company might need to improve or capitalize on emerging opportunities.
Data provided by:
The Fly
The FlyArthur J Gallagher & Co Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial picture: high revenue and adjusted EBITDA growth, broad-based organic growth across geographies and lines, steady producer retention, successful large-scale M&A execution (> $3.5B acquired revenue in 2025) and clear synergy targets. Management reiterated durable underlying margin expansion (40–60 bps) and substantial M&A firepower (up to ~$10B) while providing detailed modeling aids and transparency on comparability adjustments. Negative items were primarily near-term and technical: property pricing softness, reinsurance price declines in parts of the market, lost investment income related to the Assured Partners transaction (creating headline margin noise), and some quarterly accounting impacts from life sales and deferred revenue assumptions. These lowlights create short-term volatility but do not appear to materially impair the company’s growth trajectory or strategic outlook according to management.Positive Updates
Strong Q4 and Full-Year Revenue Growth
Fourth quarter revenue growth exceeded 30% (management: "more than 30%"), driven by M&A and organic growth. Full-year 2025 combined brokerage and risk management revenue grew 21% with 6% organic growth.
Negative Updates
Property Pricing Softness
Property renewal premium change was down ~5% in the quarter; property reinsurance market experienced double-digit rate decreases in some areas and property reinsurance premiums were down mid- to high-single digits year-over-year, creating a two-speed market (property soft, casualty firmer).
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 and Full-Year Revenue Growth
Fourth quarter revenue growth exceeded 30% (management: "more than 30%"), driven by M&A and organic growth. Full-year 2025 combined brokerage and risk management revenue grew 21% with 6% organic growth.
Read all positive updates
Company Guidance
Management guided brokerage organic growth of about 5.5% for full‑year 2026 (Q4 brokerage organic was 5%) and Gallagher Bassett (risk management) organic of ~7% with FY‑26 margins seen in the 21–22% range (Q4 GB margin 21.6%); they expect underlying brokerage margin expansion of 40–60 bps in 2026 (Q4 improvement ~50 bps; Q4 brokerage adj. EBITDAC margin 32.2%), and company adjusted EBITDAC margin was 35% for 2025 (up ~70 bps on a comparable basis). Modeling assumptions include two 25‑bp rate cuts (Apr and Sep), removal of interest income on funds held to buy Assured Partners, FX and depreciation/earn‑out assumptions, and cash taxes of ~10% of EBITDAC; available cash, expected free cash flow and borrowings could provide roughly $10 billion to fund M&A before using stock. M&A/synergy guidance: Q4 closed seven deals (~$145M of annualized revenue), full‑year 2025 acquired annualized revenue >$3.5B, a pipeline of >40 term sheets (~$350M annualized), and Assured Partners synergies of $160M by ’26 and $260–$280M by early ’28; other 2025 metrics cited include 21% revenue growth, 6% organic growth, and 26% adjusted EBITDAC growth.Arthur J Gallagher & Co Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 13.94B | 11.55B | 10.07B | 8.55B | 8.21B |
| Gross Profit | 7.63B | 4.88B | 4.25B | 3.60B | 2.98B |
| EBITDA | 3.66B | 3.10B | 2.18B | 2.18B | 1.77B |
| Net Income | 1.49B | 1.46B | 969.50M | 1.11B | 906.80M |
Balance Sheet | |||||
| Total Assets | 70.67B | 64.26B | 51.62B | 38.36B | 33.34B |
| Cash, Cash Equivalents and Short-Term Investments | 1.40B | 14.99B | 971.50M | 738.40M | 402.60M |
| Total Debt | 14.00B | 13.49B | 8.32B | 6.42B | 6.59B |
| Total Liabilities | 47.32B | 44.08B | 40.80B | 29.17B | 24.78B |
| Stockholders Equity | 23.32B | 20.15B | 10.78B | 9.14B | 8.51B |
Cash Flow | |||||
| Free Cash Flow | 1.78B | 2.44B | 1.84B | 1.21B | 1.58B |
| Operating Cash Flow | 1.93B | 2.58B | 2.03B | 1.39B | 1.70B |
| Investing Cash Flow | -15.88B | -1.59B | -3.29B | -1.00B | -3.43B |
| Financing Cash Flow | 1.72B | 13.05B | 2.87B | 212.60M | 2.68B |
Arthur J Gallagher & Co Technical Analysis
Negative
207.10
Price Trends
225.67
Negative
238.84
Negative
268.75
Negative
Market Momentum
-3.98
Negative
38.06
Neutral
41.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AJG, the sentiment is Negative. The current price of 207.1 is below the 20-day moving average (MA) of 215.27, below the 50-day MA of 225.67, and below the 200-day MA of 268.75, indicating a bearish trend. The MACD of -3.98 indicates Negative momentum. The RSI at 38.06 is Neutral, neither overbought nor oversold. The STOCH value of 41.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AJG.
Arthur J Gallagher & Co Risk Analysis
Arthur J Gallagher & Co disclosed 31 risk factors in its most recent earnings report. Arthur J Gallagher & Co reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Arthur J Gallagher & Co Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $11.22B | 23.87 | 25.30% | 1.90% | 9.64% | 15.87% | |
70 Outperform | $21.59B | 23.44 | 9.72% | 0.77% | 17.87% | -9.35% | |
69 Neutral | $53.25B | 45.10 | 6.50% | 1.01% | 17.17% | 19.12% | |
68 Neutral | $26.68B | 20.06 | 20.10% | 1.14% | ― | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $67.20B | 20.54 | 45.99% | 0.82% | 14.06% | 5.52% |
* Financial Sector Average
AJG
Arthur J Gallagher & Co
207.10
-134.75
-39.42%
AON
Aon
313.66
-82.04
-20.73%
BRO
Brown & Brown
63.43
-60.06
-48.64%
ERIE
Erie Indemnity Company
240.87
-171.14
-41.54%
WTW
Willis Towers Watson
282.18
-53.84
-16.02%
Arthur J Gallagher & Co Corporate Events
Business Operations and StrategyFinancial Disclosures
Arthur J. Gallagher posts strong Q4 2025 growth
Positive
Jan 29, 2026
Arthur J. Gallagher Co. reported its fourth quarter and full-year 2025 financial results on January 29, 2026, highlighting strong growth in its core brokerage and risk management operations. Brokerage revenues before reimbursements rose to $3.17 ...
Financial DisclosuresShareholder Meetings
Arthur J. Gallagher & Co. Plans Investor Meeting
Neutral
Dec 16, 2025
On December 3, 2025, Arthur J. Gallagher Co. announced plans to host an investor meeting on December 16, 2025. The meeting will be accessible via a webcast on the company’s website, featuring updated CFO Commentary with estimates for 2025 a...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.