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Aon Plc (AON)
NYSE:AON
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Aon (AON) AI Stock Analysis

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AO

Aon

(NYSE:AON)

Rating:71Outperform
Price Target:
$392.00
▲(11.71%Upside)
Aon's overall score reflects strong financial performance and positive earnings call highlights, tempered by technical analysis indicating bearish momentum and valuation concerns due to a high P/E ratio.
Positive Factors
Financial Health
AON plans to use significant free cash flow and debt capacity for buybacks and mergers and acquisitions, indicating strong financial health and growth potential.
Growth Strategy
AON is focused on growth and margins with a strong emphasis on organic growth and double-digit free cash flow growth.
Negative Factors
Earnings Performance
First-quarter cash EPS of $5.67 missed the $6.05 estimate.
Economic Conditions
Declining insurable risks, client cost driven behavior, and sector-specific weakness result from the overall weak economic conditions in the company's core lines of business.

Aon (AON) vs. SPDR S&P 500 ETF (SPY)

Aon Business Overview & Revenue Model

Company DescriptionAon plc is a leading global professional services firm that provides a broad range of risk, retirement, and health solutions. Operating in over 120 countries, Aon is known for its innovative solutions that empower clients to make better decisions. The company's primary sectors include risk management, insurance brokerage, reinsurance, and human resources consulting services.
How the Company Makes MoneyAon makes money through a diversified revenue model primarily driven by its risk solutions and human capital solutions segments. The risk solutions segment generates revenue through insurance brokerage services, where Aon acts as an intermediary between clients and insurance providers, earning commissions and fees. Additionally, Aon provides risk management and consulting services, offering strategic advice to manage and mitigate various business risks. The human capital solutions segment involves consulting services related to retirement, health, and welfare benefits, where Aon earns fees for advisory services. Key revenue streams include commissions from insurance placements, fees for consulting services, and management fees from running employee benefit programs. Strategic partnerships with major insurance carriers and leveraging data-driven insights further enhance Aon's ability to deliver tailored services to its clients, contributing significantly to its earnings.

Aon Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Analyzes revenue across different business units, highlighting which segments are driving growth and profitability, and where the company might be facing challenges.
Chart InsightsAon's Commercial Risk Solutions and Health Solutions segments are driving revenue growth, reflecting strategic focus and successful integration of NFP. Despite challenges in the reinsurance market, Aon maintains strong performance with a 16% total revenue increase and a 10% dividend hike, underscoring confidence in its growth strategy. The company is leveraging talent acquisition and strategic acquisitions to navigate economic complexities, aiming for sustained organic growth and margin expansion. However, currency fluctuations and reinsurance market softness pose potential headwinds.
Data provided by:Main Street Data

Aon Earnings Call Summary

Earnings Call Date:Apr 25, 2025
(Q1-2025)
|
% Change Since: -3.87%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Positive
Aon reported strong revenue and EPS growth, driven by successful integration of NFP, organic growth, and talent acquisition efforts. The increase in dividends and reaffirmation of 2025 guidance suggest confidence in ongoing performance. However, challenges such as currency fluctuations and reinsurance market conditions present headwinds. Overall, the positive highlights outweigh the lowlights.
Q1-2025 Updates
Positive Updates
Strong Revenue and EPS Growth
Aon delivered 16% total revenue growth with 5% organic revenue growth. Adjusted operating income grew by 12% and adjusted EPS was $5.67.
Dividend Increase
Aon announced a 10% increase in their quarterly dividend, marking the fifteenth consecutive year of dividend growth.
NFP Acquisition Success
NFP contributed positively to Aon's performance, celebrating one year as part of the company. The integration is performing in line with high expectations, contributing to middle market growth.
Reaffirmation of 2025 Guidance
Aon reaffirmed its 2025 guidance of mid-single-digit or greater organic revenue growth, margin expansion, strong earnings growth, and double-digit free cash flow growth.
Progress in Talent Acquisition
Significant progress was made in hiring in priority areas such as construction and surety, enhancing Aon's capability to win new clients and serve existing ones.
Negative Updates
Currency and Interest Rate Impacts
First quarter results were affected by a strong dollar and higher interest expenses, impacting margins.
Challenges in Reinsurance Market
Soft market conditions were observed with April 1 property rates in both the US and Japan down 5% to 20%.
Impact of Multiyear Reinsurance Extension
A multiyear extension with a significant client at higher limits and adjusted commission impacted reinsurance results in Q1.
Company Guidance
During Aon Plc's first-quarter 2025 earnings call, the company reaffirmed its 2025 full-year guidance, highlighting several key metrics and strategic initiatives. Aon reported a 5% organic revenue growth, contributing to a 16% total revenue increase, with a 38.4% adjusted operating margin and 12% growth in adjusted operating income. The adjusted EPS for the quarter was $5.67, and the company generated $80 million in free cash flow while returning $397 million to shareholders. Aon also announced a 10% increase in its quarterly dividend, marking the fifteenth consecutive year of dividend growth. The company emphasized the successful integration of NFP, which contributed to its results, and reaffirmed its expectations for mid-single-digit or greater organic revenue growth, margin expansion, strong earnings growth, and double-digit free cash flow growth for the full year. Aon underscored its commitment to its three by three plan and its strategy to navigate a complex economic environment by leveraging ABS capabilities, client-facing talent, and strategic acquisitions to drive sustainable growth.

Aon Financial Statement Overview

Summary
Aon exhibits strong financial health with consistent revenue and profit growth, underpinned by robust operational efficiency. However, concerns regarding leverage and negative equity slightly weigh down the score.
Income Statement
85
Very Positive
Aon has demonstrated strong revenue growth over the years, with a notable increase of approximately 31% from 2020 to TTM (Trailing-Twelve-Months). The gross profit margin is robust, consistently over 45%, highlighting efficient cost management and operational prowess. Net profit margins remain healthy, averaging around 16% in the latest periods, indicating effective control over expenses. Additionally, both EBIT and EBITDA margins are strong, reflecting a solid operational backbone and consistent earnings power.
Balance Sheet
70
Positive
The balance sheet shows a high debt-to-equity ratio primarily due to negative equity in recent years, which poses a potential risk. However, Aon has displayed a positive return on equity (ROE) in TTM, indicative of efficient management despite leverage concerns. The equity ratio is low, reflecting a reliance on debt, but the company maintains a stable asset base, which supports its operations.
Cash Flow
78
Positive
Aon's cash flow metrics reveal a strong capability to generate cash from operations, with a positive growth trend in free cash flow. The operating cash flow to net income ratio is consistently above 1, indicating that earnings are backed by cash. However, fluctuations in financing cash flows suggest strategic financial maneuvers, possibly to manage the debt levels.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue15.70B13.38B12.48B12.19B11.07B
Gross Profit7.42B6.47B6.00B5.46B5.16B
EBITDA4.94B3.91B3.83B2.58B3.21B
Net Income2.65B2.56B2.59B1.25B1.97B
Balance Sheet
Total Assets48.97B33.96B32.70B31.93B32.11B
Cash, Cash Equivalents and Short-Term Investments1.30B1.15B1.14B836.00M1.19B
Total Debt17.89B12.03B11.46B10.16B8.63B
Total Liabilities42.53B34.70B33.13B30.77B28.52B
Stockholders Equity6.12B-826.00M-529.00M1.06B3.50B
Cash Flow
Free Cash Flow2.82B3.18B3.02B2.04B2.64B
Operating Cash Flow3.04B3.44B3.22B2.18B2.78B
Investing Cash Flow-2.83B-188.00M-449.00M49.00M-679.00M
Financing Cash Flow796.00M-2.87B-1.79B-1.92B-2.09B

Aon Technical Analysis

Technical Analysis Sentiment
Negative
Last Price350.91
Price Trends
50DMA
357.99
Negative
100DMA
369.94
Negative
200DMA
369.51
Negative
Market Momentum
MACD
-1.14
Positive
RSI
43.64
Neutral
STOCH
42.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AON, the sentiment is Negative. The current price of 350.91 is below the 20-day moving average (MA) of 355.46, below the 50-day MA of 357.99, and below the 200-day MA of 369.51, indicating a bearish trend. The MACD of -1.14 indicates Positive momentum. The RSI at 43.64 is Neutral, neither overbought nor oversold. The STOCH value of 42.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AON.

Aon Risk Analysis

Aon disclosed 36 risk factors in its most recent earnings report. Aon 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

Aon Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
BRBRO
76
Outperform
$33.84B28.9516.18%0.57%12.57%10.52%
72
Outperform
$16.45B30.3132.38%1.89%15.05%26.80%
AOAON
71
Outperform
$76.90B30.3474.17%0.79%19.57%-8.09%
AJAJG
71
Outperform
$80.20B48.179.27%1.01%14.07%31.44%
68
Neutral
$16.89B11.699.78%3.90%11.76%-7.55%
MMMMC
66
Neutral
$104.44B25.4828.33%1.89%9.22%3.05%
WTWTW
63
Neutral
$30.57B-0.60%1.19%2.42%-103.64%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AON
Aon
350.91
54.18
18.26%
AJG
Arthur J Gallagher & Co
308.24
37.17
13.71%
BRO
Brown & Brown
102.49
4.97
5.10%
ERIE
Erie Indemnity Company
352.27
-30.85
-8.05%
MMC
Marsh & Mclennan Companies
210.01
-5.87
-2.72%
WTW
Willis Towers Watson
302.72
39.39
14.96%

Aon Corporate Events

Executive/Board ChangesShareholder Meetings
Aon Extends CEO’s International Assignment by One Year
Neutral
Jul 3, 2025

On June 27, 2025, Aon Corporation extended the international assignment of Gregory C. Case by one year, now set to expire on June 30, 2026. Additionally, during its 2025 Annual General Meeting, Aon shareholders approved an amendment to the Aon plc 2011 Incentive Plan, increasing the shares available for issuance and setting a minimum vesting period for equity awards. The meeting also saw the election of 12 directors and approval of various resolutions, including executive compensation and the re-appointment of Ernst & Young as auditors.

The most recent analyst rating on (AON) stock is a Buy with a $360.00 price target. To see the full list of analyst forecasts on Aon stock, see the AON Stock Forecast page.

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.Date of analysis: Jun 26, 2025