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Investing.com - Keefe, Bruyette & Woods lowered its price target on Arthur J. Gallagher (NYSE:AJG) to $275.00 from $315.00 on Friday, while maintaining a Market Perform rating on the insurance brokerage firm.
The research firm reduced its 2025, 2026, and 2027 operating cash EPS estimates to $10.85, $13.60, and $14.90, respectively, down from previous forecasts of $11.05, $13.70, and $15.00.
The downward revision follows Arthur J. Gallagher’s third-quarter 2025 earnings report, which underperformed Keefe, Bruyette & Woods’ estimates.
The firm cited expectations for slower organic growth in both the Brokerage and Risk Management segments, along with lower Brokerage margins, though this is partially offset by higher Risk Management margins.
Keefe, Bruyette & Woods stated that the current valuation "fairly balances AJG’s strong execution and continued prospects for organic and inorganic growth against a fading P&C pricing tailwind."
In other recent news, Arthur J. Gallagher reported third-quarter earnings and revenue that did not meet analyst expectations. The company posted adjusted earnings per share of $2.32, which was below the analyst consensus of $2.54. Revenue was reported at $3.33 billion, falling short of the anticipated $3.44 billion. This earnings miss contributed to a notable decline in the company’s stock value, reflecting investor disappointment despite the company’s ongoing growth efforts. Additionally, Goldman Sachs lowered its price target for Arthur J. Gallagher to $315 from $362, maintaining a Buy rating. This adjustment followed the company’s second-quarter adjusted earnings per share of $2.32, which also missed consensus expectations due to lower-than-expected seasonal EBITDAC from the recently acquired AssuredPartners business. Evercore ISI also revised its price target for the company, reducing it to $353 from $370, but maintained an Outperform rating. The adjustment was attributed to a "mixed" quarter for Gallagher, including a miss on Brokerage organic growth and core margin. These developments highlight the challenges Arthur J. Gallagher faces in meeting market expectations.
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