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Arthur J Gallagher & Co
(NYSE:AJG)
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Rating:78Outperform
Price Target:
$293.00
▲(32.21% Upside)
Action:Reiterated
Date:07/09/26
AJG scores well due to strong underlying financial performance (steady growth, resilient margins, strong cash conversion) and a constructive earnings outlook with reaffirmed guidance, synergy execution, and active M&A capacity. The score is tempered by a high valuation (P/E ~40.9, modest yield) and technically overbought momentum signals that increase near-term volatility risk.
Positive Factors
Cash Generation / Conversion
AJG’s free cash flow closely tracks reported earnings, with FCF-to-net income near 0.87–0.95 across periods. This durable cash conversion supports organic investment, tuck‑ins, sizeable buybacks and debt capacity, providing financial flexibility for multi‑year strategy execution.
Negative Factors
Property Renewal Premium Pressure
Persistent property pricing weakness, especially in cat‑exposed risks, can erode organic revenue and compress brokerage commissions. Given property renewal seasonality and competitive reinstatement of capacity, sustained rate softening could reduce organic growth and weight on medium‑term revenue trends.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation / Conversion
AJG’s free cash flow closely tracks reported earnings, with FCF-to-net income near 0.87–0.95 across periods. This durable cash conversion supports organic investment, tuck‑ins, sizeable buybacks and debt capacity, providing financial flexibility for multi‑year strategy execution.
Read all positive factors
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.
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The Fly
The FlyArthur J Gallagher & Co (AJG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$65.92B
Dividend Yield1.01%
Average Volume (3M)1.87M
Price to Earnings (P/E)40.5
Beta (1Y)0.37
Revenue Growth25.34%
EPS Growth-5.29%
CountryUS
Employees72,000
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)6.27
Shares Outstanding256,900,000
10 Day Avg. Volume1,828,561
30 Day Avg. Volume1,867,416
Financial Highlights & Ratios
PEG Ratio-3.68
Price to Book (P/B)2.89
Price to Sales (P/S)4.83
P/FCF Ratio37.74
Enterprise Value/Market Cap0.84
Enterprise Value/Revenue3.69
Enterprise Value/Gross Profit5.59
Enterprise Value/Ebitda14.21
Forecast
1Y Price Target
$268.47Price Target Upside21.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
EPS Forecast (FY)13.22
Revenue Forecast (FY)$16.74B
Arthur J Gallagher & Co Business Overview & Revenue Model
Company Description
Arthur J. Gallagher & Co., alongside its various subsidiaries, operates globally, providing a wide array of services that encompass insurance brokerage, expert consulting, and outsourced claims settlement and administration. Its geographic reach e...
How the Company Makes Money
AJG primarily makes money through (1) commissions and fees earned in its Brokerage segment and (2) fees earned in its Risk Management segment. Brokerage revenue is generated when AJG places insurance and reinsurance coverage for clients with insur...
Arthur J Gallagher & Co Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call conveys a strongly positive operational and financial tone: robust revenue growth driven by both organic expansion and M&A, sustained adjusted EBITDAC momentum (24 quarters of double-digit growth), productive AssuredPartners integration with sizable synergy potential, an active M&A pipeline and disciplined capital deployment (share repurchases). Identified headwinds—most notably property premium declines, some reinsurance pricing pressure, E&S property competitiveness and short-term comparability noise from interest income on acquisition funds—are acknowledged but portrayed as manageable within the company’s diversified portfolio and strategic initiatives (AI, productivity, cross-selling). Given the magnitude and breadth of positive results and confidence in outlook vs. the limited and contained lowlights, the overall tone is favorable.Positive Updates
Strong Top-Line Growth Driven by M&A and Organic
Total revenue growth of 28% in Q1 driven by a two-pronged strategy: organic growth of 5% and M&A contribution of 23% (notably AssuredPartners). Brokerage revenues up 30% (organic 5%) and Risk Management (Gallagher Bassett) revenues up 14% (organic 10%).
Negative Updates
Property Renewal Premium Pressure
Global retail property renewal premiums down 7% in Q1, with rate pressure most pronounced in cat-exposed and larger risks. Management flagged that property moderation is a meaningful headwind and noted Q2 typically sees the biggest property impact.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line Growth Driven by M&A and Organic
Total revenue growth of 28% in Q1 driven by a two-pronged strategy: organic growth of 5% and M&A contribution of 23% (notably AssuredPartners). Brokerage revenues up 30% (organic 5%) and Risk Management (Gallagher Bassett) revenues up 14% (organic 10%).
Read all positive updates
Company Guidance
Management reaffirmed 2026 guidance, calling for full‑year organic growth of 6% (Q1 organic 5% overall; Brokerage organic 5% in Q1; Gallagher Bassett organic 10% in Q1), and expects underlying adjusted EBITDAC margin expansion of 40–60 basis points for the year (Q1 underlying expansion ~50 bps; GB adjusted EBITDAC margin up 130 bps); AssuredPartners synergies are targeted at ~$160 million annualized by end‑2026 and up to ~$300 million by early‑2028; they closed 9 tuck‑ins in Q1 (~$60 million estimated annualized revenue) and report a pipeline of >40 term sheets (~$400 million annualized), repurchased ~1.4 million shares for ~$310 million in the quarter, expect corporate cash taxes of ~10% of EBITDAC, and say they could have roughly $10 billion of capacity to fund M&A over the next two years (noting near‑term comparability noise from ~$143–$144 million of interest income on funds held for the AssuredPartners acquisition).Arthur J Gallagher & Co Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
72
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 14.97B | 13.94B | 11.55B | 10.07B | 8.55B | 8.21B |
| Gross Profit | 9.88B | 7.63B | 4.88B | 4.25B | 3.60B | 2.98B |
| EBITDA | 3.89B | 3.66B | 3.10B | 2.18B | 2.18B | 1.77B |
| Net Income | 1.61B | 1.49B | 1.46B | 969.50M | 1.11B | 906.80M |
Balance Sheet | ||||||
| Total Assets | 78.30B | 70.67B | 64.26B | 51.62B | 38.36B | 33.34B |
| Cash, Cash Equivalents and Short-Term Investments | 1.41B | 1.40B | 14.99B | 971.50M | 738.40M | 402.60M |
| Total Debt | 1.14B | 14.00B | 13.49B | 8.32B | 6.42B | 6.59B |
| Total Liabilities | 54.50B | 47.32B | 44.08B | 40.80B | 29.17B | 24.78B |
| Stockholders Equity | 23.77B | 23.32B | 20.15B | 10.78B | 9.14B | 8.51B |
Cash Flow | ||||||
| Free Cash Flow | 1.86B | 1.78B | 2.44B | 1.84B | 1.21B | 1.58B |
| Operating Cash Flow | 2.02B | 1.93B | 2.58B | 2.03B | 1.39B | 1.70B |
| Investing Cash Flow | -15.84B | -15.88B | -1.59B | -3.29B | -1.00B | -3.43B |
| Financing Cash Flow | -112.00M | 1.72B | 13.05B | 2.87B | 212.60M | 2.68B |
Arthur J Gallagher & Co Technical Analysis
Positive
221.61
Price Trends
214.01
Positive
215.23
Positive
237.84
Positive
Market Momentum
11.50
Negative
73.81
Negative
95.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AJG, the sentiment is Positive. The current price of 221.61 is below the 20-day moving average (MA) of 228.73, above the 50-day MA of 214.01, and below the 200-day MA of 237.84, indicating a bullish trend. The MACD of 11.50 indicates Negative momentum. The RSI at 73.81 is Negative, neither overbought nor oversold. The STOCH value of 95.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $65.92B | 40.47 | 6.91% | 1.01% | 25.34% | -5.29% | |
76 Outperform | $76.36B | 19.40 | 45.09% | 0.82% | 7.51% | 55.21% | |
71 Outperform | $23.19B | 19.11 | 9.35% | 0.77% | 29.22% | -2.51% | |
71 Outperform | $11.71B | 20.20 | 25.03% | 1.90% | 4.80% | -6.97% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | $27.63B | 16.79 | 20.98% | 1.14% | 0.92% | ― |
* Financial Sector Average
AJG
Arthur J Gallagher & Co
253.09
-54.98
-17.85%
AON
Aon
356.94
4.48
1.27%
BRO
Brown & Brown
67.66
-38.14
-36.05%
ERIE
Erie Indemnity Company
251.81
-85.16
-25.27%
WTW
Willis Towers Watson
289.65
-13.88
-4.57%
Arthur J Gallagher & Co Corporate Events
Business Operations and StrategyFinancial Disclosures
Arthur J. Gallagher Schedules 2026 Outlook Investor Meeting
Neutral
Jun 17, 2026
Arthur J. Gallagher Co. announced on June 3, 2026, that it will host an investor meeting on Wednesday, June 17, 2026, providing shareholders and analysts with updated insight into its financial outlook. The company will offer a webcast and relate...
Executive/Board ChangesShareholder Meetings
Arthur J. Gallagher Stockholders Back Board, Pay, Auditor
Positive
May 13, 2026
Arthur J. Gallagher Co. held its Annual Meeting of Stockholders on May 12, 2026, at which shareholders elected all nine director nominees to serve until the 2027 Annual Meeting. The voting results showed broad support for the board slate, indicat...
Business Operations and StrategyFinancial Disclosures
Arthur J. Gallagher posts strong Q1 2026 financial results
Positive
Apr 30, 2026
Arthur J. Gallagher Co. reported strong first-quarter 2026 results on April 30, 2026, with Brokerage revenues before reimbursements rising to $4.29 billion from $3.31 billion a year earlier and adjusted Brokerage revenues at $4.29 billion versus ...
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.