- Arthur J Gallagher’s adjusted EPS for 1Q exceeded expectations, recording at $3.49 compared to an estimated $3.40.
- The company’s revenue for the same period also surpassed estimates at $3.26 billion, against an estimated $3.18 billion.
- Reported brokerage revenue exceeded predictions at $2.86 billion. The estimated figure was $2.81 billion.
- Total risk management revenue for the company was also greater than estimates; $391.4 million against an estimated $376.7 million.
- Brokerage organic revenue saw a growth of 8.9%, higher than an estimated growth of 8.26%.
- There was an organic change in fees in risk management at the rate of 13.3%, more than the estimated 12.5%.
- Market response to Arthur J Gallagher was generally favourable with 12 buys, 6 holds, and only 2 sells.
Arthur J Gallagher & Co on Smartkarma
Analysts on Smartkarma, like Baptista Research and Value Investors Club, are bullish on Arthur J Gallagher & Co. Baptista Research highlighted the company’s strategic expansion through acquiring Associated Insurance Services, with strong fourth-quarter results in 2023 showing revenue growth of 20%. Value Investors Club sees Arthur J Gallagher as a strong player in the U.S. SME broking market with potential for 10% IRR / 1.5x MOIC returns over 5 years and benefits from favorable market conditions.
Baptista Research also pointed out the potential game-changing acquisition of Clements Worldwide by Arthur J Gallagher, with strong results in various segments including impressive organic growth. The US P/C business within the retail brokerage operations showed significant underlying growth, indicating a positive outlook for the company’s future performance.
A look at Arthur J Gallagher & Co Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 2 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 2.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Arthur J Gallagher & Co, a company specializing in insurance brokerage and risk management services, is positioned for a positive long-term outlook based on Smartkarma Smart Scores. With a strong Momentum score of 4, indicating a favorable trend in company performance, Arthur J Gallagher & Co shows promising growth potential in the future. Coupled with a Growth score of 3, the company is expected to expand steadily over time.
While Value, Dividend, and Resilience scores are moderate, it is the high Momentum score that stands out, suggesting that Arthur J Gallagher & Co is well-positioned to capitalize on market opportunities and navigate challenges effectively. As per its core business activity of negotiating and placing insurance for clients, the company’s resilience (resilience score of 2) indicates its ability to withstand market fluctuations and remain competitive in the industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
Have feedback on this article? Concerned about the content? Get in touch with us directly.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
