AJG Stock Forecast & Price Target

Arthur J. Gallagher's underlying brokerage adjusted EBITDAC margin is projected to expand by 50-70 basis points in the fourth quarter of 2025 and by 70 basis points for the full year, indicating a positive trend in profitability. Consistent growth in casualty lines by 8% over the past 12 quarters highlights the company's strong position within the insurance brokerage sector, while organic growth is expected to remain robust in 2026, driven by strong reinsurance brokerage performance. Additionally, revised earnings per share estimates for 2025, 2026, and 2027 reflect improved financial projections, bolstered by favorable foreign exchange conditions and higher brokerage margins.

Arthur J. Gallagher's recent financial performance reveals a concerning trend, with reported earnings per share (EPS) of $2.32 falling short of both consensus and prior year expectations, driven primarily by lower top-line revenue and margins within the brokerage segment. Additionally, the company experienced a decrease in organic growth rates, reporting 4.5% for brokerage, below estimates of 5.1%, reflecting challenges such as declining insurable risks and sector-specific weaknesses attributed to broader economic conditions. Furthermore, projections for future growth in both the brokerage and risk management segments have been revised downward, suggesting persistently decelerating tailwinds and indicating potential long-term difficulties in achieving previously established growth targets.