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1. Company Snapshot

1.a. Company Description

Arthur J.Gallagher & Co., together with its subsidiaries, provides insurance brokerage, consulting, third-party claims settlement, and administration services in the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, India, and the United Kingdom.It operates through Brokerage and Risk Management segments.


The Brokerage segment consists of retail and wholesale insurance brokerage operations; assists retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance; acts as a brokerage wholesaler, managing general agent, and managing general underwriter for distributing specialized insurance coverage's to underwriting enterprises.This segment also performs activities, including marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance; and offers brokerage and consulting services to businesses and organizations, including commercial, not-for-profit, and public entities, as well as individuals in the areas of insurance placement, risk of loss management, and management of employer sponsored benefit programs.The Risk Management segment provides contract claim settlement and administration services to enterprises and public entities; and claims management, loss control consulting, and insurance property appraisal services.


The company offers its services through a network of correspondent insurance brokers and consultants.It serves commercial, industrial, public, religious, and not-for-profit entities.The company was incorporated in 1927 and is headquartered in Rolling Meadows, Illinois.

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1.b. Last Insights on AJG

Arthur J. Gallagher & Co.'s recent performance was negatively impacted by downbeat Q3 results, with earnings of $2.32 per share missing the Zacks Consensus Estimate of $2.51 per share. Weaker-than-expected earnings and revenues were reported, despite double-digit revenue growth for the 19th straight quarter. Rising costs and debt weigh on margins and returns, while analysts have slashed their forecasts following the Q3 results. The company's Q3 earnings call highlighted these challenges. (Source: Zacks Consensus Estimate)

1.c. Company Highlights

2. Arthur J. Gallagher's Q3 2025 Earnings: A Strong Performance

Arthur J. Gallagher & Company reported a robust 20% revenue growth in Q3 2025, with 4.8% organic growth, and adjusted EBITDAC margin expansion of 26 basis points. The company's GAAP EPS was $1.76, and adjusted EPS was $2.87, which would have been $0.22 higher if not for intra-quarter revenue seasonality related to AssuredPartners. The actual EPS came out at $2.32, slightly lower than estimates of $2.51. The Brokerage segment reported 22% revenue growth, with 4.5% organic growth, and adjusted EBITDAC margin of 33.5%, reflecting underlying margin expansion of 60 basis points.

Publication Date: Nov -01

📋 Highlights
  • Q3 2025 Revenue & Margin Growth: 20% total revenue growth, 4.8% organic; adjusted EBITDAC margin expanded 26 bps to 33.5% in Brokerage segment.
  • Earnings Per Share (EPS) Performance: GAAP EPS $1.76, adjusted EPS $2.87 (vs. $3.09 without AssuredPartners seasonality impact).
  • M&A Pipeline & Synergies: $40M annualized revenue from 5 new mergers; $400M pipeline of term sheets; $160M–$280M in annualized synergies by 2026–2028.
  • Segment Growth Outlook: Brokerage: 5% Q4 organic growth (FY >6%); Risk Management: 7% Q4 organic growth; Reinsurance: high single-digit organic growth expected.
  • Balance Sheet & Market Position: $10B liquidity for M&A; 5–7% P&C organic growth (excluding property cat); casualty pricing increases to persist amid property market softening.

Segmental Performance

The Risk Management segment reported 8% revenue growth, with 6.7% organic growth, and adjusted EBITDAC margin of 21.8%. Employee Benefits posted around 1% organic growth, driven by lower-than-expected large life cases. The company completed 5 new mergers, representing around $40 million of estimated annualized revenue, and has a pipeline of 35 term sheets signed or being prepared, representing around $400 million of annualized revenue.

Outlook and Guidance

The company expects organic growth in the Brokerage segment to be around 5% in Q4 2025, which would bring the full-year organic growth to more than 6%. For the Risk Management segment, the company expects around 7% organic growth in Q4 2025. The company also expects to deliver annualized run-rate synergies of $160 million by the end of 2026 and $260 million to $280 million by early 2028.

Valuation and Growth Prospects

With a P/E Ratio of 38.96 and an EV/EBITDA of 18.28, the market seems to be pricing in a significant growth trajectory for the company. Analysts estimate next year's revenue growth at 21.7%. The company's strong balance sheet, with available cash on hand, future free cash flows, and investment-grade borrowings, could provide around $10 billion to fund M&A before using any stock. The company's organic growth is expected to be driven by specialty business, which has higher margins, but also higher support costs.

M&A and Integration

The acquisition of AssuredPartners has added to the pipeline, but it's still early to provide guidance. The company expects AP's revenue synergies to be credited to them, not Gallagher. The integration of AssuredPartners has been beneficial, allowing the company to trade with smaller markets and expand its relationships with existing clients.

3. NewsRoom

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Arthur J. Gallagher & Co. To Webcast Investor Meeting With Management

Dec -03

Source: prnewswire.com

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Boston Family Office LLC Buys Shares of 1,150 Arthur J. Gallagher & Co. $AJG

Dec -02

Source: defenseworld.net

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Arthur J. Gallagher & Co. Acquires First Actuarial

Dec -02

Source: prnewswire.com

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Baltimore Washington Financial Advisors Inc. Buys 16,076 Shares of Arthur J. Gallagher & Co. $AJG

Nov -27

Source: defenseworld.net

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

Nov -26

Source: gurufocus.com

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Virtus Silvant Mid-Cap Growth Fund Q3 2025 Performance Review

Nov -26

Source: seekingalpha.com

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Bank Julius Baer & Co. Ltd Zurich Has $154,000 Stock Position in Arthur J. Gallagher & Co. $AJG

Nov -25

Source: defenseworld.net

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Watch These Stocks Falling 10% Or More

Nov -04

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.59%)

6. Segments

Brokerage

Expected Growth: 5.6%

Arthur J. Gallagher & Co.'s insurance brokerage services are expected to grow due to increasing demand for risk management and consulting services, expansion into new markets, and strategic acquisitions.

Risk Management

Expected Growth: 5.5%

Arthur J. Gallagher & Co.’s risk management services are expected to grow driven by increasing demand for cyber insurance, rise in mergers and acquisitions, and expansion into emerging markets.

7. Detailed Products

Risk Management

Arthur J. Gallagher & Co. provides risk management services to help clients identify, assess, and mitigate risks to their business.

Insurance Brokerage

Gallagher offers insurance brokerage services, providing clients with access to a wide range of insurance products and carriers.

Consulting

Gallagher's consulting services provide clients with expert advice on benefits, compensation, and human resources management.

Claims Advocacy

Gallagher's claims advocacy services help clients navigate the claims process, ensuring fair and timely resolution of claims.

Human Capital Consulting

Gallagher's human capital consulting services provide clients with strategic guidance on talent management, organizational design, and leadership development.

Benefits and HR Consulting

Gallagher's benefits and HR consulting services provide clients with expert guidance on employee benefits, compensation, and human resources management.

8. Arthur J. Gallagher & Co.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Arthur J. Gallagher & Co. is medium due to the presence of alternative insurance brokers and agents. However, the company's strong brand reputation and diversified product offerings mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for Arthur J. Gallagher & Co. due to the company's large customer base and diversified revenue streams. Additionally, the company's strong relationships with its clients and its ability to provide customized insurance solutions reduce the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Arthur J. Gallagher & Co. due to the company's dependence on a few large insurance carriers. However, the company's strong relationships with its suppliers and its ability to negotiate favorable terms mitigate this threat to some extent.

Threat Of New Entrants

The threat of new entrants is low for Arthur J. Gallagher & Co. due to the high barriers to entry in the insurance brokerage industry. The company's strong brand reputation, large customer base, and diversified product offerings make it difficult for new entrants to gain a foothold in the market.

Intensity Of Rivalry

The intensity of rivalry is high for Arthur J. Gallagher & Co. due to the highly competitive nature of the insurance brokerage industry. The company faces intense competition from other large insurance brokers and agents, which can lead to pricing pressure and reduced profit margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.56%
Debt Cost 4.38%
Equity Weight 56.44%
Equity Cost 7.42%
WACC 6.09%
Leverage 77.19%

11. Quality Control: Arthur J. Gallagher & Co. passed 4 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

Stock-Card
MetLife

A-Score: 6.1/10

Value: 7.3

Growth: 4.7

Quality: 5.7

Yield: 6.0

Momentum: 4.0

Volatility: 8.7

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Ameriprise Financial

A-Score: 5.9/10

Value: 5.1

Growth: 7.8

Quality: 7.8

Yield: 2.0

Momentum: 4.0

Volatility: 8.7

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Capital One

A-Score: 5.9/10

Value: 4.4

Growth: 6.3

Quality: 6.3

Yield: 3.0

Momentum: 8.5

Volatility: 6.7

1-Year Total Return ->

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Arthur J Gallagher

A-Score: 5.5/10

Value: 2.1

Growth: 6.7

Quality: 7.1

Yield: 2.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Brown & Brown

A-Score: 5.3/10

Value: 3.4

Growth: 7.4

Quality: 8.1

Yield: 1.0

Momentum: 3.0

Volatility: 9.0

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Marsh McLennan

A-Score: 5.1/10

Value: 2.7

Growth: 6.6

Quality: 5.9

Yield: 3.0

Momentum: 3.0

Volatility: 9.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

239.71$

Current Price

239.71$

Potential

-0.00%

Expected Cash-Flows