AJG
Arthur J. Gallagher & Co.$225.58
Sell
Target $191.27
Report: Mar 08, 2026Financial Services • Insurance - Brokers • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$225.58-15.2%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$191.27
(15% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$351.23
52 Week Low$195.00
Avg. 3 Month Volume2.42M
Efficiency
LTM Gross Margin83.8%
LTM EBITDA Margin26.0%
LTM EBIT Margin17.9%
LTM Operating Margin19.5%
LTM ROA2.0%
LTM ROE6.5%
LTM ROIC14.5%
LTM ROCE6.7%
Capital Structure
Market Cap (MM)$55.7B
Enterprise Value (MM)$67.8B
Shares Outstanding257.10M
Total Debt (MM)$13.48B
Cash & Equivalents (MM)$1.40B
LTM Net Debt (MM)$12.09B
LTM Net Debt/EBITDA3.3x
Growth
TTM Rev. Growth20.7%
Last 3-Yr Rev. CAGR17.7%
Last 3-Yr EBITDA CAGR18.4%
Last 3-Yr EPS CAGR3.2%
Valuation
Street Target Price$280.46
LTM EV/Revenue4.9x
LTM EV/Gross Profit5.8x
LTM EV/EBIT27.1x
LTM EV/EBITDA18.7x
LTM P/E37.3x
LTM EV/FCF38.0x
LTM P/FCF31.2x
LTM P/TB1.5x
LTM P/B2.4x
Dividend Yield1.2%
Payout Ratio44.6%
Executive SummarySituation: Current price is $225.58 versus fair value $191.27 (-15.2% expected return), and valuation confidence is stable. Debate: Bull case depends on AssuredPartners Synergy Realization Management has guided to $160 million in run-rate synergies by 2026. Bear case centers on Integration Failure and Cultural Dilution The mechanism for value destruction is the inability to integrate 300+ tuck-in agencies from AssuredPartners without losing key producers or eroding the 'Gallagher Way' culture. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Successful realization of $160 million in AssuredPartners synergies by 2026; sustained 6% organic growth driven by hardening casualty insurance rates; AI-driven productivity gains expanding brokerage margins by 40-60 basis points.
Bear Case
Continued per-share value destruction from $11.8 billion in equity dilution; ROIC of 8.7% remaining below the 9.5% cost of capital; margin compression from property pricing softness and high integration costs.
Key Catalysts
Mid-Term (6-18 months)Impact: High
AssuredPartners Synergy Realization Management has guided to $160 million in run-rate synergies by 2026. Failure to meet these milestones in...
Near-Term (0-6 months)Impact: Critical
Organic Growth Deceleration A slowdown in brokerage organic growth below the 5.5% target would signal that the 'opt-in' effect of hardening...
Long-Term (18+ months)Impact: Moderate
Arthur J. Gallagher & Co. is at a critical juncture following the completion of its largest-ever acquisition. With the stock trading below i...
Primary Risks
Concern: High
Integration Failure and Cultural Dilution The mechanism for value destruction is the inability to integrate 300+ tuck-in agencies from Assur...
Concern: Medium
Interest Rate Sensitivity and Debt Burden With $13.5 billion in debt and a 3.1x net leverage ratio, AJG is vulnerable to sustained high inte...
Concern: Medium
The stewardship verdict is one of stable but value-dilutive leadership. The board is independent and the 'World's Most Ethical Company' desi...
Recent Activity
2025-10-16Press Release
-5.40%Arthur J. Gallagher & Co. Acquires Strategic Services Group, Inc.
2025-04-04Market Movement
-7.30%Market/Sector Move -7.30%
2023-12-14SEC Filing (8-K)
-7.41%Investor meeting announcement with updated financial materials
2022-10-28SEC Filing (8-K)
+6.22%Q3 2022 financial results release showing continued growth
2022-04-29SEC Filing (8-K)
-6.04%Q1 2022 financial results release with strong performance metrics
Valuation Table
9.8/10Decision Grade
Scenario Range
$146
Bear
$314
Bull
$226