Valued at a market cap of $82.9 billion, Arthur J. Gallagher & Co. (AJG) provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to entities and individuals. The Rolling Meadows, Illinois-based company also assists clients in all areas of their employee health/welfare and retirement plans, including plan design, funding, and administration.
This insurance company's shares have significantly outpaced the broader market over the past 52 weeks. AJG has rallied 34.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17.6%. Moreover, the stock is up 15.7% on a YTD basis, compared to SPX’s 1.7% gain during the same time frame.
Zooming in further, AJG’s outperformance becomes more evident when compared to the Financial Select Sector SPDR Fund’s (XLF) 26.5% return over the past 52 weeks and 5.5% gain on a YTD basis.
On Jan. 30, Arthur J. Gallagher released its Q4 earnings results, and its stock saw a slight uptick the following day and closed up for the next six trading sessions. The company reported strong financial performance, with adjusted earnings of $2.13 per share, beating expectations and marking a 17% increase from the prior year. Revenue also slightly exceeded forecasts, rising 12.1% year-over-year to $2.7 billion.
Higher commissions, fees, and supplemental revenues, along with improved EBITDAC, fueled by lower operating costs contributed to the company's strong quarter and positive market response.
For the current fiscal year, ending in December, analysts expect AJG’s EPS to grow 14.4% year over year to $11.54. The company’s earnings surprise history is promising. It topped or met the Wall Street estimates in each of the last four quarters.
Among the 19 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on 10 “Strong Buy,” one “Moderate Buy,” seven “Hold,” and one “Strong Sell” rating.
This configuration is slightly more bullish than three months ago, with nine analysts suggesting a “Strong Buy” rating.
On Jan. 31, Truist analyst Mark Hughes maintained a “Hold” rating on Arthur J. Gallagher and raised its price target to $290. The company is trading 13.3% above this price target.
As of writing, the company is trading 1.4% above its mean price target of $323.81, while the Street-high price target of $377 suggests an upside potential of 14.8%.
On the date of publication, Neharika Jain 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.More news from Barchart
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