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Strength Seen in Arthur J. Gallagher (AJG): Can Its 3.7% Jump Turn into More Strength?
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Arthur J. Gallagher (AJG - Free Report) shares soared 3.7% in the last trading session to close at $183.60. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7% loss over the past four weeks.
The solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities, effective capital deployment and upbeat guidance continue to drive AJG. AJG expects a strong 2023 performance, given a sturdy organic outlook, margin expansion opportunities and an impressive M&A pipeline.
AJG boasts being the largest property/casualty third-party claims administrator and the fourth largest insurance broker globally based on revenues, AJG’s top line should continue to benefit from a sustained solid operational performance at its Brokerage and Risk Management segments. It estimates organic revenue growth of about 10% in 2023.
AJG has an impressive inorganic growth story. The insurance broker has quite a strong pipeline with about $300 million of revenues, associated with almost 45 term sheets, either agreed upon or being prepared. AJG estimates M&A capacity at more than $3 billion through 2023.
This insurance and risk-management company is expected to post quarterly earnings of $3.01 per share in its upcoming report, which represents a year-over-year change of +7.1%. Revenues are expected to be $2.69 billion, up 11.9% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Arthur J. Gallagher, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AJG going forward to see if this recent jump can turn into more strength down the road.
Arthur J. Gallagher is a member of the Zacks Insurance - Brokerage industry. One other stock in the same industry, Willis Towers Watson (WTW - Free Report) , finished the last trading session 4% higher at $228.45. WTW has returned -9.4% over the past month.
Willis Towers Watson's consensus EPS estimate for the upcoming report has changed -1.6% over the past month to $2.84. Compared to the company's year-ago EPS, this represents a change of +6.8%. Willis Towers Watson currently boasts a Zacks Rank of #4 (Sell).
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Strength Seen in Arthur J. Gallagher (AJG): Can Its 3.7% Jump Turn into More Strength?
Arthur J. Gallagher (AJG - Free Report) shares soared 3.7% in the last trading session to close at $183.60. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 7% loss over the past four weeks.
The solid performance of the Brokerage and Risk Management segments, strategic buyouts to capitalize on growing market opportunities, effective capital deployment and upbeat guidance continue to drive AJG. AJG expects a strong 2023 performance, given a sturdy organic outlook, margin expansion opportunities and an impressive M&A pipeline.
AJG boasts being the largest property/casualty third-party claims administrator and the fourth largest insurance broker globally based on revenues, AJG’s top line should continue to benefit from a sustained solid operational performance at its Brokerage and Risk Management segments. It estimates organic revenue growth of about 10% in 2023.
AJG has an impressive inorganic growth story. The insurance broker has quite a strong pipeline with about $300 million of revenues, associated with almost 45 term sheets, either agreed upon or being prepared. AJG estimates M&A capacity at more than $3 billion through 2023.
This insurance and risk-management company is expected to post quarterly earnings of $3.01 per share in its upcoming report, which represents a year-over-year change of +7.1%. Revenues are expected to be $2.69 billion, up 11.9% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Arthur J. Gallagher, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AJG going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Arthur J. Gallagher is a member of the Zacks Insurance - Brokerage industry. One other stock in the same industry, Willis Towers Watson (WTW - Free Report) , finished the last trading session 4% higher at $228.45. WTW has returned -9.4% over the past month.
Willis Towers Watson's consensus EPS estimate for the upcoming report has changed -1.6% over the past month to $2.84. Compared to the company's year-ago EPS, this represents a change of +6.8%. Willis Towers Watson currently boasts a Zacks Rank of #4 (Sell).