AJG Stock Forecast & Price Target

Arthur J. Gallagher is expected to experience stable growth, with an underlying brokerage adjusted EBITDAC margin projected to expand by 50-70 basis points in both 4Q25 and FY25, indicative of operational efficiency and profitability improvements. The company's organic revenue growth is anticipated to be robust, with a forecast of 6.5% for FY25, driven by consistent demand across various lines of insurance, including an 8% increase in casualty lines over the past 12 quarters. Furthermore, Gallagher's higher trading valuation compared to peers, such as AON, reflects its superior organic growth rate and a favorable earnings outlook, supported by revised EPS estimates for 2025, 2026, and 2027.

Arthur J. Gallagher reported an earnings per share (EPS) of $2.32, which fell short of the consensus estimate of $2.47, indicating a rare performance miss that stemmed from lower-than-expected revenue and margins in the brokerage segment. The company's organic growth in brokerage was recorded at 4.5%, underperforming against both prior estimates and the previous year’s growth rate of 6.1%, largely due to declining insurable risks and economic weaknesses affecting client behavior. Furthermore, adjustments to the company's growth forecasts for Risk Management suggest a cautious outlook, implying an erosion of premium valuation as expectations for future organic growth remain subdued.