Arthur J. Gallagher & Co.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
AJG's acquisition engine keeps delivering on the top line — FY2025 revenue of $13.94B grew 20.7% YoY, Q1 2026 rose 27.7% and Q2 2026 24.3% — and the stock has recovered to $254.88, above its 50-day ($246.12) and 200-day ($231.89) MAs with a positive MACD histogram of +3.39.
But at 41.78x trailing earnings, a 117% premium to the peer median of 19.26x, the multiple prices in perfection while FY2025 diluted EPS fell 11.9% (to $5.75 from $6.53) and FCF declined to $1.785B from $2.441B, and Q2 2026 operating income of $588M fell short of the prior-year $624M despite the revenue surge. Hold until integration converts deal-driven revenue into bottom-line accretion rather than further margin compression.
What could go wrong
- Valuation premium. At 41.78x trailing PE versus a peer median of 19.26x — a 117% premium — any execution misstep or guidance cut could trigger a sharp de-rating.
- Margin compression. FY2025 operating margin fell to 18.3% (from 19.8%) and net margin to 10.7% (from 12.7%); Q2 2026 operating income of $588M trailed the prior-year $624M despite 24.3% revenue growth.
- Debt and integration load. Total debt stands at $14.0B (FY2025) with FCF declining from $2.441B to $1.785B; ongoing M&A (Ornella Underwriting, Winter & Co Solicitors) could prolong integration drag.
- Insider distribution. Over the trailing 24 months insiders logged 25 dispositions versus 5 acquisitions for net value of -$46.3M, a persistent net-selling tilt.
What would change my mind
Where this comes from: FY25 fundamentals · Q1–Q2 2026 results · FY24 and FY25 fundamentals · peer comparison. Orin's read on AJG; not advice.
How has the share price moved?
Down 7.2% over twelve months, from $279.00 on 27 Oct 2025 to $259.01 at the Tue 27 Oct 2026 close. Its highest close in that time was $279.00 on 27 Oct 2025; the last close is 7.2% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 6.2M, on 12 Feb 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All AJG filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $4.6B | 0.1% |
| FMR | $4.3B | 0.2% |
| Vanguard Capital Management | $3.9B | 0.1% |
| JPMorgan Chase | $3.3B | 0.2% |
| Capital World Investors | $2.9B | 0.3% |
| Vanguard Portfolio Management | $2.9B | 0.1% |
| State Street | $2.6B | 0.1% |
| Norges Bank | $1.5B | 0.2% |
| Geode Capital Management | $1.4B | 0.1% |
| Eagle Capital Management | $1.1B | 3.4% |
98 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 236 Form 4 filings; open-market trades net −$46.3M. Of the 50 on hand, 0 were open-market purchases and 5 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about AJG
Orin answers questions about AJG from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 42.5× its last 12 months of profit (Tue 27 Oct close) — higher than in 2 of its last 5 fiscal years (middle 42.8×); the typical Financial Services company on the NYSE is at 17.6×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 42.5×near usual | 42.8× | 17.6× |
| P/S | 4.21×below usual | 4.80× | — |
| EV/EBITDA | 16.9×below usual | 21.8× | — |
| P/B | 2.8×below usual | 4.0× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $278 (from $225 to $300) — 8% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$278
$225 – $300 · +8% against the last close
- 13 buy or overweight
- 3 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 42.5× its last 12 months of profit; the middle P/E of the 4 companies it is compared to that made a profit is 19.0×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| AJGArthur J. Gallagher & Co. | $66B | 42.5× | 16.9× | 74.6% | 10.0% | 7% |
| AONAon plc | $64B | 16.5× | 14.0× | 83.1% | 22.2% | 40% |
| BROBrown & Brown, Inc. | $23B | 18.5× | 11.6× | 58.8% | 17.5% | 10% |
| MRSHMarsh & McLennan Companies, Inc. | $91B | 22.7× | 18.5× | 42.8% | 14.2% | 27% |
| WTWWillis Towers Watson Public Limited Company | $30B | 19.6× | 12.9× | 53.8% | 15.5% | 20% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 42.5× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now42.5×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Financial Services companies on the NYSE were priced at a typical 17.6× their yearly profit (Tue 27 Oct close).
- Now17.6×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A cash-flow model is not built for a bank or an insurer — its cash moves with deposits, loans and claims — so none is shown.
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.