AJG Stock Forecast & Price Target

Arthur J. Gallagher is projected to experience an expansion in its underlying brokerage adjusted EBITDAC margin by 50-70 basis points in both 4Q25 and FY25, showcasing a positive trend in operational efficiency. The company has demonstrated consistent growth in several casualty lines, with an 8% increase in that sector sustained over the past 12 quarters, further indicating a robust market position. Additionally, revised earnings per share estimates for 2025, 2026, and 2027 reflect optimism, increasing to $11.05, $13.70, and $15.00 respectively, supported by favorable foreign exchange conditions and anticipated improvements in brokerage margins.

Arthur J. Gallagher reported an EPS of $2.32, missing both the consensus and prior quarter estimates, due to a lower-than-expected top-line growth and declining margins in its brokerage segment. Organic growth in the brokerage segment was 4.5%, below both the estimated and consensus expectations of 5.1%, indicating a slowdown influenced by decreasing insurable risks and economic challenges. Additionally, projections for future organic growth in the risk management segment have been revised downwards, reflecting anticipations of ongoing deceleration in pricing tailwinds in the property and casualty insurance market.