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What's in Store for Arthur J. Gallagher (AJG) in Q1 Earnings?
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Arthur J. Gallagher & Co. (AJG - Free Report) is slated to report first-quarter 2022 earnings on Apr 28, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average being 8.76%.
Factors to Consider
Arthur J. Gallagher’s first-quarter results are expected to reflect organic revenue growth, strong customer retention and new business generation.
Fees and commissions in the to-be-reported quarter are likely to have benefited from revenues associated with acquisitions, organic revenue growth, organic change in base commission and fee revenues. The Zacks Consensus Estimate for fees is pegged at $666 million, indicating an increase of 20.2% from the prior-year period’s reported number. The consensus mark for commissions stands at $1.6 billion, implying 44.2% growth from the prior-year period’s reported number.
The property and casualty brokerage operations are likely to have benefited from continued strong customer retention, new business generation, improvement in renewal exposure units and continued increases in premium rates across most geographies and lines of coverage.
The employee benefit brokerage and consulting business is likely to have been aided by improvement in covered lives on renewal business and new consulting and special project work.
Strong new business generation, solid retentions and enhanced value-added services for the carrier partners are expected to have boosted organic growth opportunities in the first quarter of 2022.
Arthur J. Gallagher expects to witness favorable revenue benefits in the Brokerage and Risk Management segments in the first quarter of 2022, with the continued improvement in the economic conditions.
AJG’s net investment income in the to-be-reported quarter is likely to have gained from increases in interest income from U.S. operations and increases in income from partially owned entities accounted for using the equity method. The uptick is likely to have been partially offset by decreases in interest income due to a decline in interest rates earned on funds.
Organic commission, fee, supplemental revenues, contingent revenues as well as strategic mergers and acquisitions are likely to have driven the top line in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter revenue stands at $2.47 billion, indicating an increase of 15.6% from the year-ago quarter’s reported figure.
Total expenses are likely to have increased mainly due to higher compensation and operating cost, higher cost of revenues from clean coal activities, increased amortization and change in estimated acquisition earnout payables.
The Zacks Consensus Estimate for first-quarter earnings per share stands at $2.77, indicating an increase of 37.1% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arthur J. Gallagher this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of +0.76%. This is because the Most Accurate Estimate of $2.79 is pegged higher than the Zacks Consensus Estimate of $2.77. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Some other insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
NMI Holdings Inc. (NMIH - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 75 cents, indicating an increase of 20.9% from the year-ago reported figure.
NMIH’s earnings beat estimates in each of the four quarters of 2021.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +4.77% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at $3.08 per share, indicating a decrease of 49.6% from the year-ago reported figure.
ALL beat earnings estimates in three of the four quarters of 2021 and missed in one.
ProAssurance Corporation (PRA - Free Report) has an Earnings ESP of +27.54% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 17 cents, indicating an increase of 325% from the year-ago reported figure.
PRA’s earnings beat estimates in each of the four quarters of 2021.
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What's in Store for Arthur J. Gallagher (AJG) in Q1 Earnings?
Arthur J. Gallagher & Co. (AJG - Free Report) is slated to report first-quarter 2022 earnings on Apr 28, after market close. The insurer delivered an earnings surprise in each of the last four quarters, the average being 8.76%.
Factors to Consider
Arthur J. Gallagher’s first-quarter results are expected to reflect organic revenue growth, strong customer retention and new business generation.
Fees and commissions in the to-be-reported quarter are likely to have benefited from revenues associated with acquisitions, organic revenue growth, organic change in base commission and fee revenues. The Zacks Consensus Estimate for fees is pegged at $666 million, indicating an increase of 20.2% from the prior-year period’s reported number. The consensus mark for commissions stands at $1.6 billion, implying 44.2% growth from the prior-year period’s reported number.
The property and casualty brokerage operations are likely to have benefited from continued strong customer retention, new business generation, improvement in renewal exposure units and continued increases in premium rates across most geographies and lines of coverage.
The employee benefit brokerage and consulting business is likely to have been aided by improvement in covered lives on renewal business and new consulting and special project work.
Strong new business generation, solid retentions and enhanced value-added services for the carrier partners are expected to have boosted organic growth opportunities in the first quarter of 2022.
Arthur J. Gallagher expects to witness favorable revenue benefits in the Brokerage and Risk Management segments in the first quarter of 2022, with the continued improvement in the economic conditions.
AJG’s net investment income in the to-be-reported quarter is likely to have gained from increases in interest income from U.S. operations and increases in income from partially owned entities accounted for using the equity method. The uptick is likely to have been partially offset by decreases in interest income due to a decline in interest rates earned on funds.
Organic commission, fee, supplemental revenues, contingent revenues as well as strategic mergers and acquisitions are likely to have driven the top line in the to-be-reported quarter. The Zacks Consensus Estimate for first-quarter revenue stands at $2.47 billion, indicating an increase of 15.6% from the year-ago quarter’s reported figure.
Total expenses are likely to have increased mainly due to higher compensation and operating cost, higher cost of revenues from clean coal activities, increased amortization and change in estimated acquisition earnout payables.
The Zacks Consensus Estimate for first-quarter earnings per share stands at $2.77, indicating an increase of 37.1% from the year-ago quarter reported figure.
What the Zacks Model Says
Our proven model predicts an earnings beat for Arthur J. Gallagher this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of +0.76%. This is because the Most Accurate Estimate of $2.79 is pegged higher than the Zacks Consensus Estimate of $2.77. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arthur J. Gallagher & Co. Price and EPS Surprise
Arthur J. Gallagher & Co. price-eps-surprise | Arthur J. Gallagher & Co. Quote
Zacks Rank: Arthur J. Gallagher carries a Zacks Rank #1 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Some other insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
NMI Holdings Inc. (NMIH - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 75 cents, indicating an increase of 20.9% from the year-ago reported figure.
NMIH’s earnings beat estimates in each of the four quarters of 2021.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +4.77% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at $3.08 per share, indicating a decrease of 49.6% from the year-ago reported figure.
ALL beat earnings estimates in three of the four quarters of 2021 and missed in one.
ProAssurance Corporation (PRA - Free Report) has an Earnings ESP of +27.54% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter 2022 earnings is pegged at 17 cents, indicating an increase of 325% from the year-ago reported figure.
PRA’s earnings beat estimates in each of the four quarters of 2021.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.