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Don't Judge Arthur J. Gallagher & Co. on Technicals Alone - Check Its Fundamentals!

Now trading at a price of $244.97, Arthur J. Gallagher & Co. has moved -0.7% so far today.

Arthur J. Gallagher & Co. returned gains of 24.0% last year, with its stock price reaching a high of $254.0 and a low of $174.45. Over the same period, the stock outperformed the S&P 500 index by 12.0%. More recently, the company's 50-day average price was $237.09. Arthur J. Gallagher & Co., together with its subsidiaries, provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to businesses and organizations worldwide. Based in Rolling Meadows, IL, the large-cap Finance company has 46,758 full time employees. Arthur J. Gallagher & Co. has offered a 0.9% dividend yield over the last 12 months.

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Year 2018 2019 2020 2021 \ Revenue (MM) $6,934 $7,195 $7,004 $8,209
Interest Income (MM) $138 $180 $196 $226
Operating Margins 7% 9% 12% 12%
Net Margins 10% 10% 12% 12%
Net Income (MM) $676 $716 $858 $955
Depreciation & Amort. (MM) $419 $474 $562 $566
Earnings Per Share $3.4 $3.52 $4.2 $4.37

Year 2022 2023
Revenue (MM) $8,551 $9,668
Interest Income (MM) $257 $282
Operating Margins 16% 14%
Net Margins 13% 12%
Net Income (MM) $1,116 $1,141
Depreciation & Amort. (MM) $600 $661
Earnings Per Share $5.19 $5.210000000000001

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Arthur J. Gallagher & Co. has a trailing twelve month P/E ratio of 45.5, compared to an average of 14.34 for the Finance sector. Based on its EPS guidance of $10.26, the company has a forward P/E ratio of 23.1. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 7.4%. On this basis, the company's PEG ratio is 6.17, which suggests that it is overpriced. Furthermore, Arthur J. Gallagher & Co. is likely overvalued compared to the book value of its equity, since its P/B ratio of 5.05 is higher than the sector average of 1.57. The company's shares are currently trading 227.5% above their Graham number.

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The 15 analysts following Arthur J. Gallagher & Co. have set target prices ranging from $187.0 to $277.0 per share, for an average of $254.8 with a buy rating. As of April 2023, the company is trading -7.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Arthur J. Gallagher & Co. has a very low short interest because 1.2% of the company's shares are sold short. Institutions own 85.7% of the company's shares, and the insider ownership rate stands at 0.93%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 12% stake in the company is worth $6,250,686,397.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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