Arthur J. Gallagher & Co. (AJG.N): A Reasonably Consistent Quarter; Raising Estimates and PT

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Arthur J. Gallagher & Co. (AJG.N): A Reasonably Consistent Quarter; Raising Estimates and PT

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03 Aug 2026 09:50:12 ET │ 19 pages

Arthur J. Gallagher & Co. (AJG.N)

A Reasonably Consistent Quarter; Raising Estimates and PT

CITI'S TAKE

As investors have gotten more comfortable with AI and pricing risks over the

past few months, valuation has increased (from ~14X N12M EPS to ~18X).

That said, organic growth trends have not deteriorated significantly, and we Buy

remain comfortable in the 2H outlook and believe comparisons allow for Price (31 Jul 26 16:00) US$249.42

improved growth relative to year-ago levels.

Target price US$285.00↑

A reasonably consistent quarter with expectations and 1Q; raising EPS and PT — from US$250.00

AJG’s 2Q was broadly in-line with expectations with small variances in contributions Expected share price return 14.3%

to growth and margins. In aggregate, EPS of $2.84 was slightly ahead of our $2.81E Expected dividend yield 1.2%(and Bloomberg consensus of $2.82). See Figures 1-14 for the story of the quarter in

pictures. We are updating our EPS estimates to account for incrementally higher Expected total return 15.4%

contingent commission growth in 2026 (and the knock-on effects) with other small Market Cap US$64,749M

changes based on management guidance. The net result is an increase to 2026-

2030 EPS estimates of ~1% per annum. See Figures 15-17 for our updated model.

Increasing price target to $285 — We are also raising our price target to reflect the

EPS increase, slightly higher target multiples, and the roll-forward of our target by Price Performance

another quarter. Our price target of $285 implies multiples of ~20X blended N12M (RIC: AJG.N, BB: AJG US)

EPS and ~14X N12M EBITDA and represents a modest discount to our estimate of