Arthur J Gallagher & Co (AJG) AI Stock Analysis

• Market Cap: $86.57B
• Dividend Yield: 0.72%
• Average Volume (3M): 1.30M
• Price to Earnings (P/E): 52.0
• Beta (1Y): 0.39
• Revenue Growth: 14.07%
• EPS Growth: 31.44%
• Country: US
• Employees: 53,714
• Sector: Financial
• Sector Strength: 83
• Industry: Insurance - Brokers
• EPS (TTM): 3.67
• Shares Outstanding: 256,100,000
• 10 Day Avg. Volume: 929,624
• 30 Day Avg. Volume: 1,296,291
• PEG Ratio: -81.92
• Price to Book (P/B): 3.43
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 34.30
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 10.68
• Enterprise Value/Ebitda: 6.06
• 1Y Price Target: $347.50
• Price Target Upside: 2.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: ―

Arthur J Gallagher & Co is positioned strongly with robust financial growth and strategic market positioning. The strengths lie in its solid financial performance and strategic M&A activities. However, a high P/E ratio raises valuation concerns, and technical analysis suggests potential short-term challenges. Overall, the stock presents a balanced profile with a positive long-term outlook, but caution is advised due to valuation and technical headwinds.

Positive Factors

Earnings

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

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 Delays

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.

Regulatory Challenges

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. (AJG) is a global insurance brokerage and risk management services firm. Founded in 1927 and headquartered in Rolling Meadows, Illinois, the company operates in numerous sectors, providing comprehensive insurance and risk management solutions. AJG offers a wide array of services, including property and casualty insurance, employee benefits consulting, and reinsurance, serving clients ranging from small businesses to large multinational corporations.

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 robust financial performance with strong revenue and profit growth, effective cost management, and a solid balance sheet with low leverage. Impressive cash generation capabilities further bolster its financial strength, positioning the company well for future opportunities.

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: Positive
• Last Price: 338.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 338.04 is above the 20-day moving average (MA) of 333.45, above the 50-day MA of 332.37, and above the 200-day MA of 304.95, indicating a bullish trend. The MACD of 2.46 indicates Negative momentum. The RSI at 53.83 is Neutral, neither overbought nor oversold. The STOCH value of 59.78 is Neutral, 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	78 Outperform	$31.76B	30.89	16.18%	0.51%	12.57%	10.52%
AJG	74 Outperform	$86.57B	52.00	9.27%	0.72%	14.07%	31.44%
MMC	73 Outperform	$113.00B	28.13	30.51%	1.42%	7.56%	3.39%
ERIE	72 Outperform	$16.24B	29.92	32.38%	1.51%	15.05%	26.80%
AON	69 Neutral	$76.99B	30.38	74.17%	0.76%	19.57%	-8.09%
WTW	65 Neutral	$30.64B	―	-0.60%	1.15%	2.42%	-103.64%
Sector *	64 Neutral	$12.64B	9.78	7.67%	17015.08%	12.23%	-6.02%

Arthur J Gallagher & Co Corporate Events

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.