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Arthur J. Gallagher & Co. (AJG), headquartered in Rolling Meadows, Illinois, provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services. Valued at $71.1 billion by market cap, the company's principal activity is the negotiation and placement of insurance for its clients. Gallagher also specializes in furnishing risk management services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and AJG perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the insurance brokers industry. AJG’s aggressive acquisition strategy, such as integrating Willis Re, Buck, Cadence Insurance, and Eastern Insurance, reinforces its commitment to expansion and service diversification. Investment in AI and data analytics positions AJG at the forefront of innovation, improving service delivery and operational productivity, leading to enhanced profitability and client satisfaction.
Despite its notable strength, AJG slipped 10.1% from its 52-week high of $316.72, achieved on Nov. 29. Over the past three months, AJG stock dipped 4.3%, underperforming the Nasdaq Composite’s ($NASX)12.7% gains during the same time frame.
In the longer term, shares of AJG rose 26.6% on a YTD basis and climbed 16.1% over the past 52 weeks, underperforming NASX’s YTD gains of 32.7% and 35.2% returns over the last year.
To confirm the bullish trend, AJG has mostly traded above its 200-day moving average over the past year, with minor fluctuations. However, it has been trading below its 50-day moving average recently.
On Oct. 24, AJG shares closed down marginally after reporting its Q3 results. Its adjusted EPS of $2.26 met Wall Street expectations. The company’s total revenues stood at $2.8 billion, up 12.6% year over year.
AJG’s rival, Marsh & McLennan Companies, Inc. (MMC) shares lagged behind the stock, with a 13.5% gain on a YTD basis and 6.5% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on AJG’s prospects. The stock has a consensus “Moderate Buy” rating from the 19 analysts covering it, and the mean price target of $304.25 suggests a potential upside of 6.9% from current price levels.
