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Rolling Meadows, Illinois-based Arthur J. Gallagher & Co. (AJG) provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to entities and individuals. With a market cap of $62.7 billion, the company operates through Brokerage and Risk Management segments.
Shares of the insurance broker have marginally lagged behind the broader market over the past year. Over the past 52 weeks, AJG gained 27.4% compared to the S&P 500 Index’s ($SPX) 27.7% returns. In 2024, AJG is up 29%, outpacing SPX’s 18% gains on a YTD basis.
Narrowing the focus, AJG has underperformed the S&P Insurance ETF SPDR’s (KIE) 31.8% returns over the past 52 weeks but outperformed the 22.4% gains on a YTD basis.
Shares of Arthur J. Gallagher surged 3.5% following its Q2 earnings release on Jul. 25. The company reported an impressive 13.7% annual revenue growth, amounting to $2.8 billion, with a 14.4% revenue surge from the brokerage segment to $2.3 billion. Moreover, its net earnings attributable to controlling interests grew by a staggering 20.9% to $283.4 million, making investors enthusiastic.
For the current fiscal year, ending in December, analysts expect Arthur J. Gallagher’s EPS to grow by 16% annually to $10.16. Moreover, the company’s earnings surprise history is robust. It surpassed the consensus EPS estimates in each of the past four quarters. Its EPS of $2.26 in the last reported quarter marginally exceeded the projections.
Among the 18 analysts covering the AJG stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” six “Holds,” and two “Moderate Sells.”
This configuration is slightly more bullish than two months ago when eight analysts recommended “Strong Buys.”
On Aug. 13, TD Cowen analyst Andrew Kligerman maintained a “Hold” rating with a price target of $288.
Although AJG is trading above its mean price target of $284.79, the Street-high target of $312 represents a potential upside of 7.6% from current price levels.
On the date of publication, Aditya Sarawgi 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.
