Arthur J Gallagher & Co (AJG) AI Stock Analysis

• Market Cap: $81.09B
• Dividend Yield: 0.82%
• Average Volume (3M): 1.11M
• Price to Earnings (P/E): 48.7
• Beta (1Y): 0.38
• Revenue Growth: 14.07%
• EPS Growth: 31.44%
• Country: US
• Employees: 53,714
• Sector: Financial
• Sector Strength: 73
• Industry: Insurance - Brokers
• EPS (TTM): 3.67
• Shares Outstanding: 256,100,000
• 10 Day Avg. Volume: 1,288,285
• 30 Day Avg. Volume: 1,114,936
• PEG Ratio: 1.92
• Price to Book (P/B): 4.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.41
• Enterprise Value/Market Cap: 0.56
• Enterprise Value/Revenue: 1.00
• Enterprise Value/Gross Profit: 6.90
• Enterprise Value/Ebitda: 3.92
• 1Y Price Target: $352.09
• Price Target Upside: 11.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

• Rating: 68 Neutral
• Price Target: $346.00 ▲(9.27%Upside)

AJG's overall score reflects its strong financial performance and positive earnings call, tempered by technical indicators suggesting bearish momentum and a high valuation that raises overvaluation concerns. The financial health and strategic growth initiatives provide a solid foundation, although market sentiment remains cautious.

Positive Factors

Earnings

First-quarter cash EPS of $3.67 beat consensus by $0.10, driven by better-than-expected 8.5% organic growth.

Growth Potential

Analyst believes the stock is attractive given its superior EPS growth potential.

Market Position

AJG's market share is estimated to be double that of its closest competitor, Marsh, indicating a strong position in the market.

Negative Factors

Deal Uncertainty

Delays in closing the deal arguably increase the risk of AP employee attrition, and failure to close the deal would be a risk to above-consensus AJG revenue estimates.

Financial Impact

The delay will also impact AJG's near-term financials given AJG raised ~$14.8b of capital to fund the deal, setting the stage for higher interest income instead of the roll-in impact of AP.

Regulatory Concerns

The announcement of a longer regulatory review period related to its acquisition of Assured Partners was surprising given AJG's SME market shares.

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, and the United Kingdom. It operates through Brokerage and Risk Management segments. The Brokerage segment consists of retail and wholesale insurance brokerage operations; assists retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance; acts as a brokerage wholesaler, managing general agent, and managing general underwriter for distributing specialized insurance coverage's to underwriting enterprises. This segment also performs activities, including marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance; and offers brokerage and consulting services to businesses and organizations, including commercial, not-for-profit, and public entities, as well as individuals in the areas of insurance placement, risk of loss management, and management of employer sponsored benefit programs. The Risk Management segment provides contract claim settlement and administration services to enterprises and public entities; and claims management, loss control consulting, and insurance property appraisal services. The company offers its services through a network of correspondent insurance brokers and consultants. It serves commercial, industrial, public, religious, and not-for-profit entities. The company was incorporated in 1927 and is headquartered in Rolling Meadows, Illinois.

How the Company Makes Money

Arthur J. Gallagher & Co. generates revenue primarily through its insurance brokerage services. The company earns commissions and fees by acting as an intermediary between insurance providers and clients, facilitating the purchase of insurance policies. Additionally, AJG provides risk management and consulting services, which contribute to its revenue streams through service fees. The company's earnings are also bolstered by strategic acquisitions, which expand its market presence and client base. Partnerships with insurance carriers and a broad network of offices worldwide enhance its ability to deliver diverse insurance solutions, thereby driving its financial performance.

Arthur J Gallagher & Co Financial Statement Overview

Summary

Arthur J Gallagher & Co exhibits strong revenue and profit growth with efficient cost management. It maintains a low leverage balance sheet, enhancing financial stability. Strong cash generation further underscores its robust financial health.

Income Statement

Arthur J Gallagher & Co has demonstrated strong revenue growth over the years, with a revenue growth rate of 16.55% in TTM (Trailing-Twelve-Months) compared to the previous annual period. The gross profit margin for TTM is 55.07%, showcasing robust cost management capabilities. EBIT and EBITDA margins are also healthy at 23.06% and 28.17% respectively. The net profit margin stands at a solid 12.96%, reflecting efficient operations. Overall, the income statement reveals a consistently growing and profitable business, with a positive growth trajectory.

Balance Sheet

The balance sheet highlights a strong equity base with a debt-to-equity ratio of 0.04 in TTM, indicating low leverage and financial stability. Return on equity (ROE) is impressive at 6.98%, suggesting effective use of shareholder funds. The equity ratio of 30.12% signifies a solid proportion of equity financing in the asset base. While the company shows a stable financial position, maintaining low debt relative to equity enhances its financial health and reduces risk.

Cash Flow

Arthur J Gallagher & Co has generated a healthy free cash flow growth rate of 3.44% in TTM, demonstrating effective cash management. The operating cash flow to net income ratio is 1.71, indicating strong cash generation relative to profit, and the free cash flow to net income ratio is 1.62, suggesting that the company efficiently converts its profits into free cash flow. Overall, the cash flow statements reflect a strong cash generation ability, supporting ongoing operations and potential growth investments.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
12.03B	11.55B	10.07B	8.55B	8.21B	7.01B
	Gross Profit
6.62B	9.80B	4.25B	3.60B	2.98B	2.51B
	EBIT
2.77B	2.28B	1.86B	1.67B	1.34B	1.04B
	EBITDA
3.39B	3.12B	2.18B	2.18B	1.77B	1.63B
	Net Income Common Stockholders
1.56B	1.46B	969.50M	1.11B	906.80M	818.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.69B	14.99B	971.50M	342.30M	402.60M	664.60M
	Total Assets
74.10B	64.26B	51.62B	38.91B	33.34B	22.33B
	Total Debt
841.30M	13.49B	8.32B	6.42B	6.59B	4.87B
	Net Debt
-15.85B	-1.50B	7.35B	6.07B	6.19B	4.20B
	Total Liabilities
51.74B	44.08B	40.80B	29.72B	24.78B	16.10B
	Stockholders Equity
22.32B	20.18B	10.78B	9.14B	8.51B	6.19B
Cash Flow		Free Cash Flow
2.52B	2.44B	1.84B	1.94B	1.58B	1.65B
	Operating Cash Flow
2.67B	2.58B	2.03B	2.13B	1.70B	1.75B
	Investing Cash Flow
-1.67B	-1.59B	-3.29B	-1.00B	-3.43B	-416.80M
	Financing Cash Flow
14.17B	13.05B	2.87B	-522.80M	2.68B	-505.10M

Arthur J Gallagher & Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 316.64
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 316.64 is below the 20-day moving average (MA) of 332.19, below the 50-day MA of 329.99, and above the 200-day MA of 307.85, indicating a neutral trend. The MACD of -4.78 indicates Positive momentum. The RSI at 38.38 is Neutral, neither overbought nor oversold. The STOCH value of 21.47 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BRO	77 Outperform	$34.75B	29.72	16.18%	0.56%	12.57%	10.52%
AON	75 Outperform	$76.23B	30.08	74.17%	0.84%	19.57%	-8.09%
ERIE	72 Outperform	$16.61B	30.61	32.38%	1.53%	15.05%	26.80%
MMC	70 Outperform	$107.11B	26.66	30.51%	1.50%	7.56%	3.39%
AJG	68 Neutral	$81.09B	48.71	9.27%	0.82%	14.07%	31.44%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.05%	12.07%	-7.97%
WTW	64 Neutral	$29.38B	―	-0.60%	1.24%	2.42%	-103.64%

Arthur J Gallagher & Co Corporate Events

Arthur J. Gallagher & Co. Hosts Investor Meeting

Arthur J. Gallagher & Co. announced plans to host an investor meeting on June 4, 2025, with a webcast and presentation materials available on the company’s investor relations page. The presentation includes estimates for 2025 results and net after-tax cash flows from clean energy investments, highlighting the company’s focus on future financial performance and sustainability initiatives.

The most recent analyst rating on (AJG) stock is a Buy with a $282.00 price target. To see the full list of analyst forecasts on Arthur J Gallagher & Co stock, see the AJG Stock Forecast page.

Arthur J. Gallagher & Co. Holds Annual Stockholders Meeting

On May 13, 2025, Arthur J. Gallagher & Co. held its Annual Meeting of Stockholders, where all ten director nominees were elected to serve until the 2026 Annual Meeting. Additionally, the stockholders approved the appointment of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025, and endorsed the executive officers’ compensation on a non-binding advisory basis. These decisions reflect the company’s ongoing commitment to strong governance and stakeholder engagement.

The most recent analyst rating on (AJG) stock is a Buy with a $345.00 price target. To see the full list of analyst forecasts on Arthur J Gallagher & Co stock, see the AJG Stock Forecast page.

Arthur J. Gallagher Reports Strong Q1 2025 Results

On May 1, 2025, Arthur J. Gallagher & Co. announced its financial results for the first quarter of 2025, reporting significant growth in brokerage revenues and net earnings compared to the previous year. The company’s performance highlights its strong market position and effective management strategies, which are likely to positively impact stakeholders and reinforce its competitive standing in the industry.

Arthur J. Gallagher & Co. Plans Investor Meeting

On March 5, 2025, Arthur J. Gallagher & Co. announced plans to host an investor meeting on March 20, 2025, with a webcast and presentation materials available on their investor relations page. The CFO Commentary includes estimates for 2025 results and net after-tax cash flows from clean energy investments, highlighting the company’s focus on future financial performance and sustainability initiatives.