Arthur J. Gallagher & Co.

Financial Performance

5Y price score: 124

10Y return: 488.9%

DATE RANGE:

US$ Per
Share

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190.7

52-week range

313.5

268.51

Your model inputs

Required return / cost of capital

FCFF terminal growth rate

Your fair value & Margin of safety

To calculate fair value based on cost of capital and terminal growth assumptions above, please select free cash flow forecast.

Forecast:

Valuation

Free Cash Flow Yield

3.3 %

Dividend Yield TTM

1 %

Market cap $

$ 68,980

Price / Earnings TTM

44.5

Price / Book TTM

2.9

PEG TTM

(4.1)

Earnings growth and return

LTM

5YR

10YR

Total return (price & dividends)

(9.2) %

95.7 %

488.9 %

Free cash flow per share growth

91.1 %

(19.1) %

114.5 %

Earnings per share growth

(10.7) %

36.9 %

179.1 %

Founded: 1,927

Employees: 72,000

Business Summary:Arthur J. Gallagher & Co., alongside its various subsidiaries, operates globally, providing a wide array of services that encompass insurance brokerage, expert consulting, and outsourced claims settlement and administration. Its geographic reach extends across the United States, Australia, Bermuda, Canada, the Caribbean, New Zealand, India, and the United Kingdom. The company's business model is divided into two primary segments: Brokerage and Risk Management. The Brokerage division manages both retail and wholesale insurance operations. It also supports other brokers, including independent ones, in securing specialized or hard-to-place insurance coverage. This segment functions as a wholesale broker, managing general agent (MGA), and managing general underwriter (MGU) to distribute tailored insurance products to underwriting firms. Key activities within this segment include marketing, underwriting, policy issuance, premium collection, agent recruitment and supervision, claims payment, and reinsurance negotiations. It delivers essential brokerage and consulting solutions to a diverse client base, from commercial businesses, non-profit organizations, and public entities to individuals, specializing in insurance placement, managing loss exposure, and overseeing employer-sponsored benefit programs. The Risk Management segment focuses on offering contract-based claims settlement and administration services to businesses and public sector organizations. Its services also include comprehensive claims management, specialized loss control consulting, and independent insurance property appraisals. Arthur J. Gallagher & Co. delivers its extensive services through a broad network of associated insurance brokers and consultants. Its clientele is varied, serving commercial, industrial, public, religious, and non-profit organizations. The company was founded in 1927 and maintains its corporate headquarters in Rolling Meadows, Illinois.

Fair Value Reference Estimate

Latest Earnings Call Takeaways

2026 Q2 (Jul 30, 2026)

1) Strategy & Leadership
- J. Patrick Gallagher, Jr. acknowledged the passing of board member Dave Johnson, highlighting his contributions to the company.
- The company continues to execute a two-pronged revenue growth strategy, focusing on organic growth (6%) and acquisitions, resulting in a total revenue growth of 24% for Q2 2026.
- Gallagher emphasizes four strategic pillars: organic growth, mergers and acquisitions, improving productivity and quality, and maintaining company culture.

2) Financial & Segment Results
- Total revenue growth was 24%, with brokerage revenues up 26% (organic growth of 5%) and risk management segment (Gallagher Bassett) revenues up 16% (organic growth of 12%).
- Adjusted EBITAC margins for risk management improved by 140 basis points to 22.3%, with overall adjusted EBITAC growth of 22%.
- The company completed 7 tuck-in acquisitions in Q2, contributing approximately $63 million in estimated annualized revenue.

Metric	Q2 2026 Results	YoY Change
Total Revenue Growth	24%	N/A
Brokerage Revenue Growth	26%	N/A
Risk Management Revenue Growth	16%	N/A
Adjusted EBITAC Margin	22.3%	+140 bps

3) Problems / Headwinds
- The company noted a moderation in property pricing, particularly affecting the brokerage segment, with property renewal premiums down 10%.
- Gallagher anticipates challenges in maintaining organic growth rates if the pricing environment continues to soften, particularly in property lines.
- The competitive landscape in the E&S market remains challenging, especially for property, which is experiencing a pricing reset.

4) Operational or Product Plans
- Gallagher is leveraging AI and technology to enhance operational efficiencies and improve claims outcomes, with expectations of significant cost savings in the long term.
- The company is focused on integrating recent acquisitions, such as AssuredPartners, and anticipates achieving annualized run rate synergies of $160 million by the end of 2026.
- Gallagher's employee benefits segment is seeing steady demand, with clients focused on talent attraction and retention amidst rising medical costs.

5) Guidance & Outlook / Investor Angle
- Gallagher maintains a full-year organic growth outlook of 6%, with brokerage at 5.5% and risk management at 9%.
- The company has a strong M&A pipeline, with over 30 term sheets signed, representing around $500 million of annualized revenues.
- Gallagher expects to continue share repurchases opportunistically, having repurchased approximately $170 million worth of shares in Q2.

Bottom line: Gallagher's disciplined execution and strategic focus on organic growth and acquisitions have led to strong financial performance in Q2 2026. While facing headwinds from moderating property pricing, the company remains confident in its growth outlook and operational efficiencies driven by technology and strong client relationships.

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