Arthur J Gallagher & Co (AJG) AI Stock Analysis

• Market Cap: $77.98B
• Dividend Yield: 0.84%
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 45.8
• Beta (1Y): 0.42
• Revenue Growth: 15.03%
• EPS Growth: 28.86%
• Country: US
• Employees: 53,714
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Brokers
• EPS (TTM): 2.33
• Shares Outstanding: 256,400,000
• 10 Day Avg. Volume: 1,402,330
• 30 Day Avg. Volume: 1,342,942
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 6.60
• Enterprise Value/Gross Profit: 15.15
• Enterprise Value/Ebitda: 23.55
• 1Y Price Target: $343.36
• Price Target Upside: 12.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 75 Outperform
• Price Target: $338.00 ▲(11.13% Upside)

Arthur J Gallagher & Co's strong financial performance and positive earnings call sentiment are the most significant factors driving the stock score. Despite a high P/E ratio indicating potential overvaluation, the company's robust growth prospects and strategic M&A activities provide a positive outlook. Technical indicators suggest a neutral short-term trend, with no strong momentum in either direction.

Positive Factors

Strong Revenue Growth

The 16% revenue growth across key segments indicates robust demand for AJG's services, enhancing its market position and supporting long-term financial stability.

M&A Activity and Pipeline

Active M&A strategy expands AJG's client base and service offerings, driving revenue growth and strengthening competitive positioning.

Positive Margin Expansion

Margin expansion reflects operational efficiency and effective cost management, contributing to sustainable profitability and competitive advantage.

Negative Factors

Property Revenue Decline

Declining property revenue may impact overall growth and profitability, highlighting challenges in maintaining market share in this segment.

Challenges in Casualty Lines

Rising loss trends in casualty lines could pressure margins and profitability, requiring strategic adjustments to mitigate financial impact.

Uncertainty in Assured Partners Acquisition

Uncertainty in acquisition timing may delay strategic benefits and integration synergies, affecting growth plans and market expansion.

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

AJG generates revenue primarily through commissions and fees earned from its insurance brokerage services, where it acts as an intermediary between clients and insurance carriers. The company charges clients for consulting services related to risk management and employee benefits, providing tailored solutions to meet their specific needs. Key revenue streams include the brokerage of property and casualty insurance, employee benefits consulting, and risk management services. AJG also earns income from the sale of insurance products and services, as well as from its global network of partnerships with various insurance providers, enhancing its service offerings and market reach. Additionally, AJG's growth strategy includes acquisitions of smaller agencies, which expands its client base and revenue potential.

Arthur J Gallagher & Co Financial Statement Overview

Summary

Arthur J Gallagher & Co exhibits strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is robust with low leverage and stable returns on equity. While cash flow generation has seen some decline, the company maintains a strong cash conversion ratio, indicating resilience. Overall, the financial position is strong, with opportunities to enhance cash flow efficiency.

Income Statement

Arthur J Gallagher & Co has demonstrated consistent revenue growth with a 3.7% increase in TTM, following a strong 14.7% growth in the previous year. The company maintains healthy profitability with a gross profit margin of 55.18% and a net profit margin of 13.16% in TTM. EBIT and EBITDA margins are also robust at 20.97% and 28.25%, respectively, indicating efficient operations and cost management.

Balance Sheet

The company's balance sheet shows a strong equity position with a debt-to-equity ratio of 0.67 in the latest annual report, improving to 0.05 in TTM, reflecting reduced leverage. Return on equity is stable at 8.45% in TTM, suggesting effective use of shareholder funds. The equity ratio stands at 28.73%, indicating a solid capital structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 21.91% in TTM, which is a concern. However, the company maintains a strong free cash flow to net income ratio of 93.02%, indicating good cash conversion. The operating cash flow to net income ratio is lower at 4.98%, suggesting potential areas for improvement in cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.47B	11.55B	10.07B	8.55B	8.21B	7.01B
Gross Profit	5.44B	4.88B	4.25B	3.60B	2.98B	2.51B
EBITDA	3.50B	3.10B	2.18B	2.18B	1.77B	1.63B
Net Income	1.64B	1.46B	969.50M	1.11B	906.80M	818.80M
Balance Sheet
Total Assets	80.12B	64.26B	51.62B	38.36B	33.34B	22.33B
Cash, Cash Equivalents and Short-Term Investments	14.30B	14.99B	971.50M	738.40M	402.60M	664.60M
Total Debt	13.30B	13.49B	8.32B	6.42B	6.59B	4.87B
Total Liabilities	57.07B	44.08B	40.80B	29.17B	24.78B	16.10B
Stockholders Equity	23.02B	20.18B	10.78B	9.14B	8.51B	6.19B
Cash Flow
Free Cash Flow	1.97B	2.44B	1.84B	1.21B	1.58B	1.65B
Operating Cash Flow	2.12B	2.58B	2.03B	1.39B	1.70B	1.75B
Investing Cash Flow	-2.71B	-1.59B	-3.29B	-1.00B	-3.43B	-416.80M
Financing Cash Flow	14.43B	13.05B	2.87B	212.60M	2.68B	-505.10M

Arthur J Gallagher & Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 304.15
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 304.15 is above the 20-day moving average (MA) of 299.03, above the 50-day MA of 297.71, and below the 200-day MA of 311.91, indicating a neutral trend. The MACD of 1.08 indicates Negative momentum. The RSI at 57.42 is Neutral, neither overbought nor oversold. The STOCH value of 85.34 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BRO	76 Outperform	$30.93B	27.04	15.43%	0.64%	11.68%	-0.17%
AJG	75 Outperform	$77.98B	45.85	9.49%	0.84%	15.03%	28.86%
AON	75 Outperform	$76.78B	29.81	33.19%	0.80%	18.42%	-4.44%
ERIE	70 Outperform	$14.72B	26.64	30.21%	1.70%	12.19%	17.82%
MMC	67 Neutral	$98.11B	23.95	26.17%	1.68%	9.22%	3.05%
WTW	65 Neutral	$33.35B	238.93	1.69%	1.05%	1.27%	-84.75%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Arthur J Gallagher & Co Corporate Events

Arthur J. Gallagher Completes Acquisition of AssuredPartners

On August 18, 2025, Arthur J. Gallagher & Co. completed its acquisition of AssuredPartners, a leading U.S. insurance broker. The transaction, valued at $13.8 billion, was financed through previously disclosed equity and debt financing transactions. This acquisition is expected to expand Gallagher’s retail middle-market property/casualty and employee benefits focus across the U.S., deepen capabilities in niche practice groups, and enhance its presence in the U.K. and Ireland. The integration aims to deliver significant value to clients and shareholders, with anticipated double-digit adjusted EPS accretion.

Arthur J Gallagher & Co Q2 2025 Revenue Surge

On July 31, 2025, Arthur J. Gallagher & Co. announced its financial results for the second quarter ending June 30, 2025. The company reported an increase in brokerage revenue to $2,785.6 million from $2,376.3 million in the same quarter of the previous year, reflecting strong operational performance. The results indicate a positive trajectory for the company, potentially enhancing its market position and benefiting stakeholders.