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Investing.com -- Aon’s push to expand its workforce in important sectors like construction, energy and health should give it faster and more durable growth than rivals, Morgan Stanley said, upgrading the insurance broker to Overweight from Equal-weight.
Brokerage said Aon’s hiring plans, combined with strong margins and efficiency gains from its Aon Business Services platform, position it to take market share as peers struggle with a weaker pricing environment.
“Aon’s investments into talent in strategic areas … should lead to increased organic growth as the productivity from these hires starts to ramp up and have a material impact in 2H25 and beyond,” Morgan Stanley analysts wrote.
The firm expects Aon to outgrow similar-sized peers by 50 to 100 basis points into 2026 and 2027, helped by a planned 4% to 8% rise in client-facing roles that could each generate $300000 or more in revenue once fully ramped.
Margins also set Aon apart. Already the highest in the sector, they are expected to expand further by 80 to 120 basis points over the next two years as the company centralizes and automates more operations.
“We believe the company should outperform peers on a relative basis and support a premium valuation multiple,” the analysts said.
Aon’s valuation currently sits in line with rival Marsh McLennan, but Morgan Stanley argued the discount to Aon’s historical levels is unwarranted given stronger growth prospects.
Rising M&A activity should also provide an extra lift, with Aon broadening its advisory services beyond private equity into corporate clients.
Morgan Stanley raised its price target to $430 from $387.