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Research Alert: CFRA Maintains Buy Opinion On Shares Of Arthur J. Gallagher & Co.

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target price by $55, to $235, valuing AJG shares at 18x our '26 EPS estimate of $13.26 (lowered today by $0.24), and at 16x our '27 EPS estimate of $14.90 (cut by $0.30), versus the shares' three-year average forward multiple of 24x and a peer average of 14x. AJG posted Q1 adjusted EPS of $4.47 versus $3.72 the prior year, missing our $4.56 estimate but topping the $4.43 consensus view. Q1 revenue growth of 28% exceeded our 12%-18% forecast, largely due to acquisitions, though firm-wide organic growth of 5% lagged our 7%-10% forecast. We view AJG as one of the better consolidators in the industry, though growing investor concern exists over execution risks inherent in this acquisition strategy. While we acknowledge these concerns, we think the shares', currently trading at 15x our '26 EPS estimate, are undervalued versus historical averages. Our rating is Buy.

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