Hedge funds are buying these two big tech stocks while selling two rivals
Investing.com - Raymond James has reiterated its Underperform rating on Aon Corp (NYSE:AON), though no price target was specified in the analysis. This comes as InvestingPro data shows 10 analysts have revised their earnings downwards for the upcoming period.
The firm acknowledges that Aon has outperformed its competitor Marsh & McLennan Companies (MMC) year-to-date, with Aon shares down 4% compared to MMC’s 15% decline. Aon also delivered stronger third-quarter 2025 organic revenue growth at 7.0% versus MMC’s 4.0%.
Despite this relative strength, Raymond James warns both companies may face pressure in the fourth quarter of 2025. For Aon, this pressure could stem from delays in U.S. advisory work and the sale of the NFP wealth business, while MMC faces cyclical headwinds in its consulting and career businesses.
Valuation remains a key factor in Raymond James’ cautious stance, as Aon currently trades at approximately a 5% premium to MMC on a next-twelve-months price-to-earnings basis. This represents Aon’s five-year peak relative valuation, compared to its five-year average discount of 9.2%. InvestingPro data confirms valuation concerns, showing Aon trading at a P/E ratio of 27.21 and a high PEG ratio of 3.96, indicating premium pricing relative to growth.
The firm believes Aon has limited relative upside potential as long as MMC’s current challenges prove to be temporary rather than structural. Analyst targets range from $325 to $449, with the consensus recommendation leaning toward Hold. InvestingPro analysis indicates Aon is trading near its Fair Value, with several additional financial health metrics and ProTips available to subscribers through comprehensive Pro Research Reports covering what really matters for smarter investing decisions.
In other recent news, Aon PLC reported its third-quarter 2025 earnings, surpassing analyst expectations. The company achieved an adjusted earnings per share (EPS) of $3.05, exceeding the forecasted $2.91, marking a 4.81% surprise. Aon also reported revenue of $4 billion, outperforming the expected $3.96 billion. These results reflect a positive performance for the company during this period. The earnings announcement has been noted as a significant development for investors. Additionally, the company’s stock experienced a rise in pre-market trading following the earnings release. This upward movement signals investor optimism regarding Aon’s financial health. The results have been well-received by the market, showcasing Aon’s strong quarterly performance.
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