BMO maintains Aon stock rating, $373 target amid leadership change

On Tuesday, BMO Capital Markets sustained its Market Perform rating and a $373.00 price target for Aon Corp (NYSE:AON) stock, in light of recent executive changes within the company. Currently trading at $389.33 with a market capitalization of $83.95 billion, InvestingPro data shows Aon trading at a P/E ratio of 31.1, indicating a premium valuation. The announcement comes after Aon disclosed that Eric Andersen, the company’s President, is set to take on a new position as senior advisor to CEO Greg Case.

The transition, which was reported on March 17, mirrors a similar shift in Aon’s leadership structure that occurred when former CFO Christa Davies stepped down in July 2024. BMO Capital’s analyst Michael Zaremski shared insights on the potential impact of Andersen’s departure, suggesting that some investors might perceive it as a loss of key talent that has been instrumental in driving Aon’s stock performance over the past decade. Indeed, InvestingPro data reveals the company has delivered impressive results, with revenue growing 17.36% in the last twelve months and maintaining dividend payments for 46 consecutive years.

Zaremski’s analysis draws a parallel to the reaction to Davies’s retirement last year, which subsequently led to the board of directors’ decision to extend CEO Greg Case’s employment agreement for an additional two years, now set to expire in April 2028.

Aon, a leading global professional services firm providing a broad range of risk, retirement, and health solutions, has not yet announced a successor for Andersen’s role as President. The company’s management transition comes at a time when Aon continues to navigate the complexities of the global professional services market.

Investors and analysts alike will be closely monitoring the company’s performance and leadership dynamics following this announcement, as Aon seeks to maintain its competitive position in the industry. The maintained Market Perform rating and price target by BMO Capital indicates a steady outlook for Aon’s stock as it undergoes these executive changes.

In other recent news, Aon plc reported significant leadership changes, with CEO Greg Case assuming the additional role of President as Eric Andersen transitions to a senior advisory role. Andersen, who has been with Aon since 1997, will continue advising Case until June 2026. The company also announced that Michael Neller will move from his position as Chief Accounting Officer to become the Deputy Global Chief People Officer, focusing on Total (EPA:TTEF) Rewards and Talent Development. Aon has not yet named a successor for Neller’s current role, but a search is underway.

In terms of financial analysis, Keefe, Bruyette & Woods raised their price target for Aon shares to $414, maintaining an Outperform rating, citing Aon’s strong organic growth and improved margins. Meanwhile, BMO Capital reduced their price target to $373, keeping a Market Perform rating due to Aon’s fourth-quarter performance not meeting free cash flow estimates. BMO’s analysts noted a decrease in earnings projections for 2025 and 2026 due to foreign exchange impacts and reduced revenue from mergers and acquisitions, though stronger margins are expected to partially offset these factors.

Evercore ISI also maintained an Outperform rating on Aon, with a price target of $420, following Andersen’s transition. The firm highlighted potential impacts on employee turnover and organic growth but noted Aon’s strategic focus on organic hiring and mergers could mitigate these effects. These developments reflect Aon’s ongoing efforts to adapt its leadership and financial strategies to align with its long-term goals.

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