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With a market cap of over $59 billion, Illinois-based Arthur J. Gallagher & Co. (AJG), founded in 1927, provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to entities and individuals worldwide. The insurance brokerage giant is expected to announce its fiscal Q2 earnings for 2024 after the market closes on Thursday, July 25.
Ahead of the event, analysts expect Arthur J. Gallagher to report a profit of $2.24 per share, up 17.9% from $1.90 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimate over the last four quarters. Its adjusted EPS for the last reported quarter increased 15.6% year over year to $3.49, beating the Wall Street estimates by 2.7%.
Looking ahead to fiscal 2024, analysts expect Arthur J. Gallagher to report an EPS of $10.10, up 15.3% from $8.76 in fiscal 2023. Its fiscal 2025 EPS is projected to grow 12% annually to $11.31.
AJG stock has gained 20.5% on a YTD basis, outperforming the S&P 500 Index’s ($SPX) 17.7% returns and S&P 500 Financials Sector SPDR’s (XLF) 12.7% gains over the same time frame.
Arthur J. Gallagher has been outperforming the broader market due to its aggressive acquisition strategy throughout 2024, including recent purchases like Connecticut-based Cleary Benefits Group Inc., NetClaim, Cornerstone Commercial & Personal Insurance Services, Inc., and Zayla Partners, LLC. These acquisitions have bolstered AJG's consulting and service capabilities significantly. With additional acquisitions in June (Crawford Insurance, LLC and OperationsInc, LLC) and May (Acumen Advisors, Inc. and Health Insurance Consultants Australia), AJG continues to expand its market footprint and enhance its service offerings.
Investors have responded positively to these strategic moves, driving AJG stock up by 4.6% in July alone. This growth reflects confidence in AJG's ability to capitalize on growth opportunities and strengthen its position in the insurance brokerage sector.
The consensus opinion on Arthur J. Gallagher & Co. stock is moderately bullish, with a “Moderate Buy” rating overall. Out of 17 analysts covering the stock, eight recommend a “Strong Buy,” one suggests a “Moderate Buy,” six analysts are playing it safe with a “Hold,” and the remaining two advise a “Moderate Sell” rating.
Although the stock currently trades higher than the average analyst target price of $266.57, the Street-high target price of $294 for AJG indicates a potential upside of 8.5% from the current price levels.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
