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On Thursday, Evercore ISI analyst David Motemaden increased the price target for Arthur J. Gallagher & Co. (NYSE: AJG) to $352 from $336, while maintaining an Outperform rating on the stock. Motemaden adjusted the 2025 earnings per share (EPS) estimate downward by 3% to account for the delayed closing of the AP deal, which is now expected in the latter part of the third quarter of 2025, rather than the initially anticipated first quarter. This adjustment reflects a 5-6% impact from the deal’s timing.
The analyst also noted improvements in the company’s core EPS, citing stronger organic growth in the first and second quarters of the year, with increases of 8.6% and 7.5%, respectively, compared to previous forecasts of 7% for both quarters. Additionally, the Woodruff deal is expected to contribute approximately 1% accretion. InvestingPro data shows impressive revenue growth of 14.31% over the last twelve months, with the company maintaining dividend payments for 41 consecutive years.
Looking ahead to 2026, Motemaden’s estimates show a 3% rise, factoring in a full year of contributions from the Woodruff acquisition and the carryover of a better-than-expected organic revenue growth from the first half of 2025.
The price target adjustment to $352 is based on the revised higher EPS projections. Motemaden expressed confidence that Arthur J. Gallagher’s valuation could continue to improve, notwithstanding the temporary concerns related to the AP deal. The analyst anticipates that investor focus will shift towards the company’s sustainable revenue growth, which is projected to be between 8-10%, including 6-8% from organic growth and an additional 2-3% from strategic mergers and acquisitions.
In other recent news, Arthur J. Gallagher & Co. has reported several significant developments that are capturing investor attention. The company has completed the acquisition of Philinsure, expanding its presence in the Asian market, though the financial terms remain undisclosed. In addition, Arthur J. Gallagher has entered into a definitive agreement to acquire San Francisco-based broker Woodruff Sawyer for $1.2 billion, with the transaction expected to close in the second quarter of 2025. This acquisition is anticipated to enhance the company’s client offerings and capabilities.
Meanwhile, BMO Capital Markets has maintained its Outperform rating for Arthur J. Gallagher, with a price target of $332, expressing confidence in the company’s strategic growth plans despite regulatory scrutiny of its pending acquisition of AssuredPartners. The regulatory review period for this acquisition has been unexpectedly extended, raising concerns about potential impacts on workforce stability and revenue projections. Additionally, Keefe, Bruyette & Woods has raised its price target for Arthur J. Gallagher to $308, maintaining a Market Perform rating. This adjustment reflects expectations of positive contributions from the Woodruff Sawyer acquisition, although it notes potential offsets from increased expenses.
These recent developments underscore Arthur J. Gallagher’s active pursuit of strategic acquisitions to bolster its market position and service offerings.
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