AJG Valuation

Arthur J. Gallagher & Co.

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294.510

+1.79(0.612%)1D

Overview
Forecast
Valuation
Earnings

AJG Relative Valuation

AJG's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, AJG is overvalued; if below, it's undervalued.

Historical Valuation

Arthur J. Gallagher & Co. (AJG) is now in the Fair zone, suggesting that its current forward PE ratio of 23.58 is considered Fairly compared with the five-year average of 24.10. The fair price of Arthur J. Gallagher & Co. (AJG) is between 270.23 to 320.42 according to relative valuation methord.

Relative Value

Fair Zone

270.23-320.42

Current Price：294.51

Fair

23.58

Trailing

Forward

14.03

EV/EBITDA

Arthur J. Gallagher & Co.. (AJG) has a current EV/EBITDA of 14.03. The 5-year average EV/EBITDA is 15.81. The thresholds are as follows: Strongly Undervalued below 13.11, Undervalued between 13.11 and 14.46, Fairly Valued between 17.16 and 14.46, Overvalued between 17.16 and 18.51, and Strongly Overvalued above 18.51. The current Forward EV/EBITDA of 14.03 falls within the Undervalued range.

16.05

EV/EBIT

Arthur J. Gallagher & Co.. (AJG) has a current EV/EBIT of 16.05. The 5-year average EV/EBIT is 14.61. The thresholds are as follows: Strongly Undervalued below 0.84, Undervalued between 0.84 and 7.73, Fairly Valued between 21.49 and 7.73, Overvalued between 21.49 and 28.38, and Strongly Overvalued above 28.38. The current Forward EV/EBIT of 16.05 falls within the Historic Trend Line -Fairly Valued range.

4.83

Arthur J. Gallagher & Co.. (AJG) has a current PS of 4.83. The 5-year average PS is 4.31. The thresholds are as follows: Strongly Undervalued below 2.76, Undervalued between 2.76 and 3.53, Fairly Valued between 5.08 and 3.53, Overvalued between 5.08 and 5.85, and Strongly Overvalued above 5.85. The current Forward PS of 4.83 falls within the Historic Trend Line -Fairly Valued range.

20.86

P/OCF

Arthur J. Gallagher & Co.. (AJG) has a current P/OCF of 20.86. The 5-year average P/OCF is 20.28. The thresholds are as follows: Strongly Undervalued below 12.01, Undervalued between 12.01 and 16.15, Fairly Valued between 24.41 and 16.15, Overvalued between 24.41 and 28.54, and Strongly Overvalued above 28.54. The current Forward P/OCF of 20.86 falls within the Historic Trend Line -Fairly Valued range.

18.92

P/FCF

Arthur J. Gallagher & Co.. (AJG) has a current P/FCF of 18.92. The 5-year average P/FCF is 18.99. The thresholds are as follows: Strongly Undervalued below 7.62, Undervalued between 7.62 and 13.30, Fairly Valued between 24.68 and 13.30, Overvalued between 24.68 and 30.36, and Strongly Overvalued above 30.36. The current Forward P/FCF of 18.92 falls within the Historic Trend Line -Fairly Valued range.

Arthur J. Gallagher & Co. (AJG) has a current Price-to-Book (P/B) ratio of 3.28. Compared to its 3-year average P/B ratio of 4.62 , the current P/B ratio is approximately -28.92% higher. Relative to its 5-year average P/B ratio of 4.31, the current P/B ratio is about -23.94% higher. Arthur J. Gallagher & Co. (AJG) has a Forward Free Cash Flow (FCF) yield of approximately 2.63%. Compared to its 3-year average FCF yield of 3.22%, the current FCF yield is approximately -18.38% lower. Relative to its 5-year average FCF yield of 4.14% , the current FCF yield is about -36.53% lower.

3.28

P/B

Median3y

4.62

Median5y

4.31

2.63

FCF Yield

Median3y

3.22

Median5y

4.14

Competitors Valuation Multiple

The average P/S ratio for AJG's competitors is 3.50, providing a benchmark for relative valuation. Arthur J. Gallagher & Co. Corp (AJG) exhibits a P/S ratio of 4.83, which is 38.07% above the industry average. Given its robust revenue growth of 16.05%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

AJG.N

Arthur J. Gallagher & Co.

Marsh & McLennan Companies Inc

Willis Towers Watson PLC

Performance Decomposition

Market capitalization of AJG increased by 0.66% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 2.78B to 3.22B.

The secondary factor is the Margin Expansion, contributed 10.60%to the performance.

Overall, the performance of AJG in the past 1 year is driven by Revenue Growth. Which is more sustainable.

16.05%

2.78B → 3.22B

Revenue Growth

10.60%

10.28 → 11.37

Margin Expansion

-25.99%

59.13 → 43.76

P/E Change

0.66%