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What's in Store for Arthur J. Gallagher (AJG) in Q3 Earnings?

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Arthur J. Gallagher (AJG - Free Report) is set to report third-quarter 2019 earnings on Oct 24 after market close. The company delivered positive surprise in the last four quarters with the average being 3.26%.

Let’s see what’s in store for the company in the soon-to-be reported quarter.

Arthur J. Gallagher’s third-quarter earnings are likely to have benefited from strong performance of Brokerage and Risk Management segments. Better pricing is expected to have contributed as well.

Organic growth, strategic buyouts, solid domestic and international operations are likely to have aided aided fees and commissions. The Zacks Consensus Estimate for fees is currently pegged at $493 million, indicating 8.8% increase from the year-ago period reported figure, while that for commissions is $817 million, indicating 15.4% increase from the year-ago period reported figure.
               
The domestic and international operations are likely to have contributed to total revenues of the company. The Zacks Consensus Estimate for revenues is pegged at $1.9 billion, indicating 6.1% increase from the year-ago reported figure.

Expenses are likely to have increased due to increase in compensation and operating expenses, well as higher interest expenses. This, in turn, might have restricted margin expansion.

The Zacks Consensus Estimate for third quarter earnings stands at 79 cents, implying nearly 1.28% increase from the year-ago quarter reported figure.

What Our Quantitative Model States

Our proven model does not conclusively predict 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. But that’s not the case here.

Earnings ESP: Arthur J. Gallagher has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 79 cents. 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

Zacks Rank: Arthur J. Gallagher carries a Zacks Rank #3.

Stocks to Consider

Some stocks from the insurance industry with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Brown & Brown, Inc. (BRO - Free Report) is set to report third-quarter earnings on Oct 28. It has an Earnings ESP of +1.3% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Marsh & McLennan Companies (MMC - Free Report) has an Earnings ESP of +0.41% and is a Zacks #3 Ranked player. The company is slated to announce third-quarter earnings on Oct 29.

The Allstate Corporation (ALL - Free Report) is set to report third-quarter earnings on Oct 29. It has an Earnings ESP of +4.2% and a Zacks Rank of 1.

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