Arthur J. Gallagher & Co. (AJG)

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AI: Overvalued

Price checkThe price demands stronger per-share gains than recent reported results have delivered.

At $249.42, buyers pay $43.50 for each $1 of 2025 diluted earnings. The June share count implies a $63.9 billion market value. First-half 2026 reported earnings were $4.41 per share, versus $7.31 after excluding acquisition, integration, amortization, and other items. Those exclusions have mixed economic meaning, so adjusted earnings do not provide a clean bargain signal. The price assumes promised acquisition savings arrive and comparable-business revenue keeps growing near 5%-6%; that optimism supports an Overvalued verdict.

Big pictureRevenue has compounded quickly, but cash and per-share earnings have grown less smoothly.

Revenue nearly doubled from $7.0 billion in 2020 to $13.9 billion in 2025, while net income rose 82%. Diluted earnings per share increased only 37%, partly because the share count grew 33%. Operating cash flow—cash generated by normal operations—remained positive every year, but fell 25% to $1.93 billion in 2025. It recovered to $967 million in first-half 2026 from $448 million a year earlier. Capital-spending data are unavailable, preventing a dependable calculation of cash left after operating and investment needs.

Business strengthRecurring client work supports resilience, while acquisition debt and softer pricing raise risk.

Second-quarter revenue rose 24% to $3.96 billion, including 6% growth from businesses owned in both periods. Base commissions and fees grew 4%, showing durable demand without relying entirely on purchases. However, reported earnings fell to $1.25 per share from $1.40 as acquisition costs weighed. June net debt was $12.1 billion, about 6.3 times 2025 operating cash flow. Because brokerage commissions often move with insured values and premium prices, softer property pricing could slow growth before integration savings reduce that debt burden.

What could change the storyAssuredPartners must deliver promised savings without further dilution to justify today’s premium.

Gallagher expects the roughly $14 billion AssuredPartners purchase to produce annual savings of $160 million by year-end 2026 and $325 million by early 2028. Achieving those targets while sustaining 5%-6% comparable-business growth is the strongest bull case. The bear case is slower savings, weaker base-fee growth, or debt remaining near $12 billion. Shares outstanding have risen 32% since 2020, although $480 million of first-half 2026 repurchases kept the latest count roughly flat. Debt below $10 billion with double-digit per-share earnings growth would materially strengthen the valuation case.

$249.42 price considered

AI: News

Mixed second-quarter resultsAcquisitions drove rapid revenue growth, but reported earnings fell as integration costs remained heavy.

On July 30, 2026, Gallagher reported second-quarter revenue of $3.96 billion, up 24%, with 6% comparable-business growth. Reported earnings fell from $1.40 to $1.25 per share, while adjusted earnings rose from $2.30 to $2.84 after excluding acquisition and other costs. A July 31 report placed the shares about 3% lower at $249.42. The timing makes earnings a plausible contributor, but does not prove causation. The split highlights strong underlying growth alongside meaningful integration burdens.

Synergy target increasedManagement raised its long-term savings goal, making successful integration more important to future earnings.

At the June 17, 2026 investor meeting, Gallagher projected annualized AssuredPartners savings of $160 million by year-end 2026 and $325 million by early 2028, above the approximately $300 million discussed after first-quarter results. The increase matters because AssuredPartners cost roughly $14 billion and helped create today’s elevated debt. No reliable standalone market reaction was identified. The value effect depends on actually removing costs without losing clients, producers, or revenue during system conversions.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$13.94B	$11.55B	$10.07B	$8.55B	$8.21B	$7.00B	$7.20B	$6.93B	$6.25B	$5.68B	$5.39B	$4.63B	$3.18B	$2.52B	$2.13B	$1.86B	$1.73B	$1.65B
Operating expenses	$2.26B	$1.75B	$1.69B	$1.33B	$1.07B	$906.5M	$1.07B	$903.7M	$829.1M	$776.3M	$840.7M	$743.1M	$535.9M	$483.2M	$419.0M	$354.6M	$331.3M	$382.4M
Net income	$1.49B	$1.46B	$970.0M	$1.11B	$906.8M	$818.8M	$668.8M	$633.5M	$481.3M	$396.8M	$356.8M	$303.4M	$268.6M	$195.0M	$144.1M	$174.1M	$128.6M	$77.3M
Basic EPSper diluted share	$5.83	$6.63	$4.51	$5.30	$4.47	$4.29	$3.60	$3.47	$2.67	$2.23	$2.07	$1.98	$2.08	$1.61	$1.29	$1.66	$1.28	$0.83
Diluted EPSper diluted share	$5.74	$6.50	$4.42	$5.19	$4.37	$4.20	$3.52	$3.40	$2.64	$2.22	$2.06	$1.97	$2.06	$1.59	$1.28	$1.66	$1.28	$0.82

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys6$1.32M disclosed value

Sells (SEC code S)42$76.34M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 2, 2026Form 4	CARY RICHARD CController, CAO	SellCommon Stock	3.0K	$206.00	$618.0K	47.8K
Mar 6, 2026Form 4	Hudson Scott RVice President	SellCommon Stock	3.8K	$227.57	$864.8K	85.9K
Mar 5, 2026Form 4	Mead Christopher EVICE PRESIDENT	SellCommon Stock	4.0K	$227.12	$908.5K	19.3K
Mar 2, 2026Form 4	GALLAGHER J PATRICK JRCEO	SellCommon Stock	27.4K	$230.31	$6.32M	96.5K
Dec 23, 2025Form 4	Mead Christopher EVICE PRESIDENT	SellCommon Stock	4.0K	$258.11	$1.03M	17.3K

Review ownership filings at SEC.gov ↗

Arthur J. Gallagher & Co. (AJG)

Financial charts

Financial statements

Insider buys & sells