AJG - 2Q Organic Setup Still Challenging, But Macro / Valuation Probably Driving Stock

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AJG - 2Q Organic Setup Still Challenging, But Macro / Valuation Probably Driving Stock

Truist Securities

Equity Research Report June 15, 2026

FINANCIALS: Insurance Arthur J. Gallagher & Co. (AJG)

AJG - 2Q Organic Setup Still Challenging, But Macro / Valuation Mark Hughes, CFA

615-748-4422 Probably Driving Stock

Mark.Hughes@truist.com

Maxwell Fritscher Gallagher management will provide an update on business trends during its investor call

404-439-9753 on 6/17. Our regression (R=83%) suggests the company’s 2Q Brokerage organic should be

Maxwell.Fritscher@truist.com 5.2% – this is also the Street mean – helped by the impact of sustained inflation on nominal

GDP (Figure 1). That said, we would again shade that to the downside given the trend in

commercial lines premium – historically a governor of broker organic – which has weakened

the last two quarters. Also, we see further deceleration through May in the monthly pricing

Stock Rating HOLD and volume indicators, namely the state E&S data and IVANS premium renewals.

Unchanged

Price Target $225.00 Commercial P&C premium growth is the baseline for broker organic growth. It makes

Unchanged sense that broker organic should be closely tied to overall commercial lines premium

(R=86%), which represents the universe of opportunity for the bigger brokers (who tend

to have modest personal lines exposure). Figure 2 underscores this idea, while also

highlighting the brokers’ outperformance in 2023 and 2024 and their return to the norm, i.e.

TR to Target 4.2% inline performance, starting in 1Q25.

Price (Jun. 12, 2026) $218.69 Commercial lines growth was 3.4% in the first quarter and has probably slowed in

52-Wk Range $325.98-$192.00 2Q. The industry maintained quarterly growth in the 5-7% range in 2023 and 2024 before