Arthur J. Gallagher stock price target raised to $347 by Goldman Sachs

Investing.com - Goldman Sachs raised its price target on Arthur J. Gallagher (NYSE:AJG) to $347.00 from its previous target while maintaining a Buy rating on the insurance brokerage firm. The new target aligns with the broader analyst consensus, as InvestingPro data shows analyst targets ranging from $280 to $388, with 7 analysts recently revising their earnings estimates upward.

The firm cited AJG’s solid mid-quarter update, which it viewed as better than feared amid concerns about pricing deceleration. Management maintained its third-quarter 2025 Brokerage organic growth guidance and projected 6.5% full-year 2025 Brokerage organic growth, slightly above consensus expectations of 6.4%. This outlook builds on the company’s strong performance, with revenue growing 11.2% over the last twelve months to $11.55 billion.

Market conditions showed modest improvement quarter-to-date compared to the second quarter of 2025, with property renewal premium change improving by 2 percentage points to -5%, while casualty decelerated 1 percentage point to +7%. The company continues to see bifurcation between account sizes, with renewal premium changes at +3% for small accounts and -1% for large accounts.

Goldman Sachs noted that AJG provided positive updated guidance on its acquisition of AssuredPartners, including increased synergy guidance to a midpoint of $270 million, up from $160 million previously. The firm also highlighted upbeat commentary regarding integration and long-term growth potential.

The improved synergy expectations led Goldman Sachs to increase its 2027 Brokerage adjusted EBITDAC margin estimate by 30 basis points, with 2025-2027 EPS estimates rising by less than 1%, reflecting what the firm calculates as a 19% total return opportunity.

In other recent news, Arthur J. Gallagher & Co. reported its Q2 2025 earnings, missing analysts’ forecasts. The company posted an adjusted earnings per share (EPS) of $2.33, which was below the projected $2.36. Additionally, revenue for the quarter came in at $3.17 billion, falling short of the expected $3.21 billion. In terms of acquisitions, Arthur J. Gallagher has recently completed its acquisition of AssuredPartners, marking the largest acquisition in the company’s history. This move is expected to significantly expand its operations in the U.S., U.K., and Ireland. Further expanding its reach, the company also acquired Bremer Insurance Agencies, Inc. and MACK Insurance Services, though financial terms for these deals were not disclosed. Following these acquisitions, Goldman Sachs reinstated coverage on Arthur J. Gallagher with a Buy rating, citing expected high-single-digit accretion to its 2027 earnings per share estimates. These developments highlight a period of strategic expansion for Arthur J. Gallagher.

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