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On Friday, Keefe, Bruyette & Woods analysts adjusted their outlook on Arthur J. Gallagher & Co. (NYSE:AJG), increasing the firm’s price target from $308.00 to $314.00. The analysts maintained a Market Perform rating on the insurance brokerage’s stock. This price target revision follows the company’s first-quarter 2025 investor meeting.
The analysts, led by Meyer Shields, have revised their earnings per share (EPS) estimate for 2025 downward to $10.95 from $11.65, taking into account the anticipated closure of the AssuredPartners acquisition on October 1. Conversely, their EPS estimate for 2026 has been raised to $13.65 from $13.55, reflecting expectations for accelerated organic growth within the Brokerage segment and a higher Brokerage EBITDAC margin for 2025. InvestingPro data shows strong fundamentals supporting this outlook, with revenue growth forecast at 37% for FY2025 and a solid financial health score.
Arthur J. Gallagher’s management team confirmed their forecast for 6-8% organic growth in 2025 during the investor meeting. They also reiterated their expectations for continued margin expansion, citing a favorable operating environment for the industry. The company’s current gross profit margin stands at 43.68%, and InvestingPro has identified 13 additional key investment factors for this stock, including its 14-year track record of consecutive dividend increases.
The Keefe, Bruyette & Woods analysts explained their valuation, noting that the stock is trading at 23.0 times their estimated 2026 cash EPS. This valuation is in line with the median of the peer group, which stands at 23.8 times, leading them to consider Arthur J. Gallagher’s shares as fairly valued at the current price level.
The updated price target of $314 is based on a multiple of 23.0 times the analysts’ projected 2026 EPS. The investment firm’s perspective indicates a belief in the company’s potential for sustained revenue growth, both organically and through acquisitions, along with margin improvements in the coming years.
In other recent news, Arthur J. Gallagher & Co. has seen several developments that may interest investors. Evercore ISI analyst David Motemaden raised the company’s stock target to $352, citing improvements in core earnings per share (EPS) due to stronger-than-expected organic growth in the first half of the year. The analyst also noted the potential positive impact of the Woodruff acquisition on the company’s financials. Meanwhile, BMO Capital Markets has maintained an Outperform rating with a $332 price target, expressing confidence in the successful acquisition of AssuredPartners, despite an extended regulatory review period. The acquisition is seen as crucial for Arthur J. Gallagher’s revenue projections and market positioning.
Additionally, Arthur J. Gallagher has completed the acquisition of Philinsure, expanding its presence in the Asian market. The move is part of the company’s strategy to enhance its retail brokerage capabilities in the region. In another update, Keefe, Bruyette & Woods (KBW) raised their price target for Arthur J. Gallagher to $308, following the announcement of the company’s $1.2 billion acquisition of Woodruff Sawyer. This acquisition is expected to contribute positively to the company’s growth, with revised cash EPS estimates for 2025 and 2026. These recent activities reflect Arthur J. Gallagher’s ongoing efforts to strengthen its market position and expand its global footprint.
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