Aon plc (AON) | Investment Case

1. Company Snapshot

1.a. Company Description

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide.It offers commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captives management; and health solutions, such as health and benefits brokerages, and health care exchanges.The company also provides treaty and facultative reinsurance, as well as insurance-linked securities, capital raising, strategic advice, restructuring, and mergers and acquisitions services; and corporate finance advisory services and capital markets solutions products.

In addition, it offers strategic design consulting services on their retirement programs, actuarial services, and risk management services; advice services on developing and maintaining investment programs across a range of plan types, including defined benefit plans, defined contribution plans, endowments, and foundations for public and private companies, and other institutions; and advice and solutions that help clients in risk, health, and wealth through commercial risk, reinsurance, health, and wealth solutions.Further, the company offers CoverWallet; Affinity; Aon Inpoint; CoverWallet; and ReView services.Aon plc was founded in 1919 and is headquartered in Dublin, Ireland.

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1.b. Last Insights on AON

Negative drivers behind Aon plc's recent 3 months performance include escalating compensation and benefits costs, partly offset by new business growth in Commercial Risk Solutions and Health Solutions businesses. The company's Q2 results were impacted by rising costs, which may pressure its margins. Additionally, Aon's strategic investment in eMed to scale its GLP-1 population health platform may divert resources and attention away from other areas of the business.

1.c. Company Highlights

Last Price	345.2
Change Percentage	-0.72%
Open	346.72
Previous Close	347.71
Market Cap ( Millions)	74633
Volume	697043
Year High	412.97
Year Low	323.73
M A 50	348.75
M A 200	363.83

FCF Yield	4.07%
Dividend Yield	0.84%
ROE	37.78%
Debt / Equity	222.02%
Net Debt / EBIDTA	317.78%
Price To Book	9.38
Price Earnings Ratio	27.27
Price To FCF	24.55
Price To sales	4.38
EV / EBITDA	17.52

2. Aon plc's Strong Q3 2025 Earnings: A Closer Look

Aon plc reported a robust financial performance in the third quarter of 2025, with 7% organic revenue growth, a 26.3% adjusted operating margin, and 12% adjusted EPS growth. The company's adjusted operating income increased 15% to $1.1 billion, driven by strong growth across all solution lines, including Commercial Risk, Reinsurance, and Health Solutions. The actual EPS came out at $3.05, beating estimates of $2.91.

Publication Date: Nov -04

                                    📋 Highlights
                                    Organic Revenue & EPS Growth::
                                                7% organic revenue growth, 12% adjusted EPS growth in Q3 2025.
Operating Margin Expansion::
                                                Adjusted operating margin reached 26.3%, up 170 basis points with $1.1B adjusted operating income.
Free Cash Flow Generation::
                                                $1.1B free cash flow in Q3, $1.9B year-to-date, up 13% YoY, driving double-digit growth guidance for 2025.
Shareholder Returns::
                                                $411M returned to shareholders in Q3 ($250M share repurchases), with $1B allocated via buybacks in 2025.
Capital Position Strength::
                                                Leverage ratio reduced to 3.2x in Q3, on track to hit 2.8x–3.0x by Q4 2025, with $2B from NFP Wealth sale.

                                

Revenue Growth Drivers

The company's revenue growth was driven by new business and high retention, with an 11-point contribution from new business, balanced between expansion with existing clients and new client wins. Revenue-generating hires were up 6% year-to-date, with the 2024 hiring cohort continuing to ramp and contribute to new business growth. As Gregory Case, President and CEO, highlighted, the company's focus on execution and client relationships is driving value delivery and strong financial performance.

Segment Performance

Commercial Risk saw strong growth, driven by the durable growth drivers, including the analyzers helping the company win RFPs. Health Solutions had a strong quarter, with 6% organic growth, driven by net new business, expansion with existing customers, and market impact from rising healthcare costs. Reinsurance saw pressure on the rate side, but demand is high, and clients are buying more sideways coverage to cover perils.

Valuation and Outlook

With a P/E Ratio of 26.85 and an EV/EBITDA of 17.26, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 5.1%. Given the company's strong financial performance and growth prospects, it is likely that Aon plc will continue to deliver value to its shareholders. The company's commitment to active management of its balance sheet and capital position is expected to drive long-term shareholder value creation.

Capital Allocation and Shareholder Return

Aon plc has strengthened its capital position with over $2 billion in proceeds from the sale of NFP Wealth. The company remains disciplined in allocating capital, balancing opportunities that meet its strategic and financial growth priorities with capital return to shareholders. The company has returned $411 million to shareholders in the quarter, including $250 million in share repurchases.

3. NewsRoom

4 Stocks to Watch From the Thriving Insurance Brokerage Industry

Dec -04

Source: zacks.com

Aon to Speak at the Goldman Sachs U.S. Financial Services Conference

Dec -01

Source: prnewswire.com

MS Global Franchise Portfolio's Strategic Moves: Synopsys Inc. Takes Center Stage

Nov -26

Source: gurufocus.com

Here Are Thursday's Top Wall Street Analyst Research Calls: AON, Apollo Global Managment, Bullish, Jack Henry, Marsh & McClennan, Nasdaq, NVIDIA,

Nov -20

Source: 247wallst.com

Jennifer Kupcho Clinches $1 Million Aon Risk Reward Challenge Title in Final-Event Comeback

Nov -18

Source: prnewswire.com

Advisors Capital Management LLC Increases Stake in Aon plc $AON

Nov -14

Source: defenseworld.net

Dodge & Cox's Strategic Moves: Aon PLC Takes Center Stage with 0.67% Portfolio Impact

Nov -13

Source: gurufocus.com

Aon plc $AON Shares Sold by Americana Partners LLC

Nov -11

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.83%)

6. Segments

Risk Capital

Expected Growth: 6.5%

Risk Capital's 6.5% growth is driven by Aon's robust broking capabilities, expanded product offerings, and strategic acquisitions. The segment benefits from increased demand for risk management solutions, particularly in emerging markets. Aon's data analytics and digital platforms also enhance client engagement, driving organic growth.

Human Capital

Expected Growth: 7.5%

Aon's Human Capital segment growth of 7.5% is driven by increasing demand for data-driven HR solutions, expansion of its health and benefits business, and strategic acquisitions. The segment's strong performance is also attributed to its robust technology platform and growing adoption of its Workday and ADP integrations.

Corporate/Eliminations

Expected Growth: 5.0%

The 5.0% growth in Corporate/Eliminations at Aon plc is driven by organic growth, pricing strategies, and favorable market conditions. The segment benefits from a strong global presence, diversified product offerings, and efficient cost management. Additionally, Aon's investments in digital transformation and innovation contribute to revenue expansion and improved profitability.

7. Detailed Products

Commercial Risk Solutions

Aon provides commercial risk solutions to help clients manage and mitigate risks associated with their businesses, including property, casualty, and liability risks.

Reinsurance Solutions

Aon's reinsurance solutions help clients manage and transfer risk to capital market investors, providing an alternative to traditional reinsurance.

Retirement and Health Solutions

Aon provides retirement and health solutions to help clients manage their employee benefits and pension plans, including actuarial services, health consulting, and retirement plan design.

Cyber Risk Solutions

Aon's cyber risk solutions help clients manage and mitigate cyber risks, including cyber threat assessment, incident response planning, and cyber insurance.

Data and Analytics

Aon's data and analytics solutions provide clients with insights and intelligence to inform their risk management and business decisions, including data analysis, modeling, and benchmarking.

Outsourcing and Administration

Aon provides outsourcing and administration services to help clients manage their HR and benefits functions, including benefits administration, payroll processing, and HR consulting.

8. Aon plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Aon plc operates in the insurance and reinsurance industry, where substitutes such as captive insurance, self-insurance, and alternative risk transfer (ART) solutions exist. However, these substitutes are not perfect and have limitations, which maintains a moderate threat level.

Bargaining Power Of Customers

Aon plc's customers are typically large corporations and individuals seeking insurance and reinsurance services. These customers have limited bargaining power due to the complexity of insurance products and the company's strong market position.

Bargaining Power Of Suppliers

Aon plc's suppliers are primarily insurance and reinsurance companies, which are numerous and competitive. This competition limits the bargaining power of individual suppliers.

Threat Of New Entrants

The insurance and reinsurance industry has high barriers to entry, including regulatory requirements, capital requirements, and established relationships with clients. This limits the threat of new entrants.

Intensity Of Rivalry

The insurance and reinsurance industry is highly competitive, with many established players competing for market share. Aon plc competes with other major brokers and insurers, leading to a high level of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	74.51%
Debt Cost	5.61%
Equity Weight	25.49%
Equity Cost	8.71%
WACC	6.40%
Leverage	292.31%

11. Quality Control: Aon plc passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

KBC

A-Score: 7.4/10

Value: 6.9

Growth: 6.0

Quality: 6.7

Yield: 7.5

Momentum: 9.0

Volatility: 8.3

1-Year Total Return ->

Allianz

A-Score: 7.4/10

Value: 7.0

Growth: 4.9

Quality: 7.5

Yield: 8.1

Momentum: 7.5

Volatility: 9.3

1-Year Total Return ->

Deutsche Börse

A-Score: 6.4/10

Value: 4.2

Growth: 7.9

Quality: 7.3

Yield: 3.1

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

Deutsche Bank

A-Score: 5.8/10

Value: 8.3

Growth: 3.4

Quality: 5.9

Yield: 3.1

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

Aon

A-Score: 4.9/10

Value: 1.8

Growth: 6.8

Quality: 6.0

Yield: 1.2

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

Willis Towers Watson

A-Score: 4.9/10

Value: 2.4

Growth: 4.0

Quality: 5.7

Yield: 1.2

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

4.53%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.40%

Aon plc - IE00BLP1HW54

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on AON

1.c. Company Highlights

Lower Yield

Average Growth

Stable Momentum

Earnings Miss

Medium Volatility

Weak Momentum

Expensive

Higher Growth

Earnings Beats

Revenues Miss

Less Volatile

Strong Momentum

Revenues Beats

2. Aon plc's Strong Q3 2025 Earnings: A Closer Look

Revenue Growth Drivers

Segment Performance

Valuation and Outlook

Capital Allocation and Shareholder Return

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.83%)

6. Segments

Risk Capital

Expected Growth: 6.5%

Human Capital

Expected Growth: 7.5%

Corporate/Eliminations

Expected Growth: 5.0%

7. Detailed Products

Commercial Risk Solutions

Reinsurance Solutions

Retirement and Health Solutions

Cyber Risk Solutions

Data and Analytics

Outsourcing and Administration

8. Aon plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Aon plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

345.2$

Current Price

345.2$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA