Aon (AON) AI Stock Analysis

• Market Cap: $76.17B
• Dividend Yield: 0.84%
• Average Volume (3M): 1.26M
• Price to Earnings (P/E): 30.1
• Beta (1Y): 0.32
• Revenue Growth: 19.57%
• EPS Growth: -8.09%
• Country: US
• Employees: 60,000
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Brokers
• EPS (TTM): 5.67
• Shares Outstanding: 215,939,910
• 10 Day Avg. Volume: 1,576,551
• 30 Day Avg. Volume: 1,255,225
• PEG Ratio: -4.17
• Price to Book (P/B): 10.96
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.01
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 12.21
• Enterprise Value/Ebitda: 5.02
• 1Y Price Target: $410.42
• Price Target Upside: 15.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

• Rating: 71 Outperform
• Price Target: $392.00 ▲(9.88%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 driving organic growth through new business with existing clients, new hires, and maintaining a high retention rate.

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 Business Overview & Revenue Model

Company Description

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide. It offers commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captives management; and health solutions, such as health and benefits brokerages, and health care exchanges. The company also provides treaty and facultative reinsurance, as well as insurance-linked securities, capital raising, strategic advice, restructuring, and mergers and acquisitions services; and corporate finance advisory services and capital markets solutions products. In addition, it offers strategic design consulting services on their retirement programs, actuarial services, and risk management services; advice services on developing and maintaining investment programs across a range of plan types, including defined benefit plans, defined contribution plans, endowments, and foundations for public and private companies, and other institutions; and advice and solutions that help clients in risk, health, and wealth through commercial risk, reinsurance, health, and wealth solutions. Further, the company offers CoverWallet; Affinity; Aon Inpoint; CoverWallet; and ReView services. Aon plc was founded in 1919 and is headquartered in Dublin, Ireland.

How the Company Makes Money

Aon 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 Financial Statement Overview

Summary

Aon demonstrates strong financial health with consistent revenue and profit growth. The income statement shows robust revenue increase and high profit margins. Despite a high debt-to-equity ratio and concerns over leverage, Aon maintains strong cash flow and operational efficiency, which mitigates some risks.

Income Statement

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.36B	15.70B	13.38B	12.48B	12.19B	11.07B
Gross Profit	7.71B	7.42B	6.47B	6.00B	5.46B	5.16B
EBITDA	5.14B	4.94B	3.91B	3.83B	2.58B	3.21B
Net Income	2.55B	2.65B	2.56B	2.59B	1.25B	1.97B
Balance Sheet
Total Assets	50.30B	48.97B	33.96B	32.70B	31.93B	32.11B
Cash, Cash Equivalents and Short-Term Investments	1.33B	1.30B	1.15B	1.14B	836.00M	1.19B
Total Debt	18.51B	17.89B	12.03B	11.46B	10.16B	8.63B
Total Liabilities	43.03B	42.53B	34.70B	33.13B	30.77B	28.52B
Stockholders Equity	7.00B	6.12B	-826.00M	-529.00M	1.06B	3.50B
Cash Flow
Free Cash Flow	2.64B	2.82B	3.18B	3.02B	2.04B	2.64B
Operating Cash Flow	2.87B	3.04B	3.44B	3.22B	2.18B	2.78B
Investing Cash Flow	1.84B	-2.83B	-188.00M	-449.00M	49.00M	-679.00M
Financing Cash Flow	-4.81B	796.00M	-2.87B	-1.79B	-1.92B	-2.09B

Aon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 356.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 356.76 is below the 20-day moving average (MA) of 358.66, below the 50-day MA of 358.39, and below the 200-day MA of 368.90, indicating a bearish trend. The MACD of -2.08 indicates Negative momentum. The RSI at 48.54 is Neutral, neither overbought nor oversold. The STOCH value of 51.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AON.

Aon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BRO	78 Outperform	$35.71B	30.55	16.18%	0.55%	12.57%	10.52%
ERIE	72 Outperform	$15.85B	29.21	32.38%	1.60%	15.05%	26.80%
AON	71 Outperform	$76.17B	30.06	74.17%	0.84%	19.57%	-8.09%
AJG	71 Outperform	$81.37B	48.87	9.27%	0.82%	14.07%	31.44%
MMC	70 Outperform	$106.91B	26.61	30.51%	1.50%	7.56%	3.39%
WTW	64 Neutral	$30.19B	―	-0.60%	1.21%	2.42%	-103.64%
Sector *	62 Neutral	AU$9.98B	8.01	10.79%	5.19%	32.02%	38.31%

Aon Corporate Events

Aon Board Member Fulvio Conti Announces Retirement

On April 7, 2025, Fulvio Conti announced his decision to retire from Aon plc’s Board of Directors after more than 15 years of service, effective following the 2025 Annual General Meeting. His departure is not due to any disagreements with the company’s operations, policies, or practices. The company expressed gratitude for his valuable contributions, particularly in international business and finance, highlighting the impact of his insights on the board’s operations.