Arthur J Gallagher provides insurance brokerage and risk management services in the United States and internationally. It operates through three segments: Brokerage, Risk Management, and Corporate. The company was founded in 1927 and is based in Itasca, Illinois.
AJG Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Arthur J Gallagher & Co with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Arthur J Gallagher & Co ranked in the 68th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Arthur J Gallagher & Co ended up being:
Arthur J Gallagher & Co's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 21.56% of tickers in our DCF set.
As a business, Arthur J Gallagher & Co experienced a tax rate of about 1% over the past twelve months; relative to its sector (Financial Services), this tax rate is higher than just 21.76% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
ORI, OCSI, TRV, FNF, and WRB can be thought of as valuation peers to AJG, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
Arthur J. Gallagher & Co. (NYSE:AJG) will announce its earnings results after the market closes on Thursday, January 28th. Analysts expect the company to announce earnings of $0.76 per share for the quarter. Investors that wish to listen to the company’s conference call can do so using this link. Arthur J. Gallagher & Co. (NYSE:AJG) […]