Zacks Investment Research Lowers Arthur J Gallagher & Co (AJG) to Hold

Arthur J Gallagher & Co (NYSE:AJG) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued to clients and investors on Friday, January 19th.

According to Zacks, “Shares of Arthur J. Gallagher have outperformed the industry, in a year's time. The company has also seen its 2018 estimates move north in the last 60 days.  Arthur J. Gallagher’s inorganic story seems impressive with strategic buyouts, with the company intending to pursue smaller tuck-in mergers in 2017. It remains focused on tapping opportunities in the U.K., Australia, New Zealand, Canada and the U.S. The company remains focused on enhancing productivity and quality that is a part of its value creation strategy. A solid performance is leading to sufficient cash flows help it deploy capital in shareholder-friendly moves. However, escalating expenses and weak commercial P&C rates pose concerns. Adverse foreign exchange also will weigh on results. It is set to release fourth quarter results on Jan 25. A Zacks Rank #3 increases the predictive power of a beat, but combined with the Earnings ESP of -0.45%, makes prediction difficult.”

A number of other research analysts also recently commented on the stock. Royal Bank of Canada reaffirmed a “hold” rating and issued a $64.00 target price on shares of Arthur J Gallagher & Co in a research report on Friday, December 8th. Credit Suisse Group increased their price target on shares of Arthur J Gallagher & Co from $68.00 to $69.00 and gave the stock an “outperform” rating in a research note on Friday, October 27th. Wells Fargo & Co set a $74.00 price target on shares of Arthur J Gallagher & Co and gave the stock a “buy” rating in a research note on Friday, December 8th. Keefe, Bruyette & Woods reiterated a “buy” rating and set a $77.00 price target on shares of Arthur J Gallagher & Co in a research note on Friday, December 22nd. Finally, ValuEngine cut shares of Arthur J Gallagher & Co from a “buy” rating to a “hold” rating in a research note on Friday, December 1st. Five equities research analysts have rated the stock with a hold rating, six have given a buy rating and one has issued a strong buy rating to the company’s stock. The company has a consensus rating of “Buy” and an average price target of $71.44.

Shares of Arthur J Gallagher & Co (AJG) traded up $1.22 during trading hours on Friday, hitting $68.20. 777,436 shares of the company’s stock were exchanged, compared to its average volume of 1,230,000. Arthur J Gallagher & Co has a 52 week low of $54.50 and a 52 week high of $70.55. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.08 and a current ratio of 1.05. The stock has a market cap of $12,330.00, a P/E ratio of 26.85, a PEG ratio of 1.67 and a beta of 1.24.

Arthur J Gallagher & Co (NYSE:AJG) last posted its earnings results on Thursday, January 25th. The financial services provider reported $0.82 EPS for the quarter, beating the Zacks’ consensus estimate of $0.75 by $0.07. The firm had revenue of $1.60 billion for the quarter, compared to the consensus estimate of $1.48 billion. Arthur J Gallagher & Co had a net margin of 7.52% and a return on equity of 13.95%. The company’s revenue was up 15.5% on a year-over-year basis. During the same period last year, the firm posted $0.66 EPS. research analysts expect that Arthur J Gallagher & Co will post 3.57 earnings per share for the current fiscal year.

In other news, Director Frank E. Jr. English sold 600 shares of the stock in a transaction dated Friday, February 9th. The shares were sold at an average price of $63.71, for a total value of $38,226.00. Following the completion of the transaction, the director now owns 10,000 shares in the company, valued at approximately $637,100. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, VP Scott R. Hudson sold 7,600 shares of the stock in a transaction dated Friday, December 8th. The shares were sold at an average price of $65.29, for a total transaction of $496,204.00. Following the completion of the transaction, the vice president now owns 25,027 shares of the company’s stock, valued at approximately $1,634,012.83. The disclosure for this sale can be found here. Insiders sold a total of 21,200 shares of company stock valued at $1,442,355 in the last 90 days. Company insiders own 1.60% of the company’s stock.

A number of large investors have recently bought and sold shares of AJG. Citadel Advisors LLC increased its holdings in Arthur J Gallagher & Co by 785.9% during the 2nd quarter. Citadel Advisors LLC now owns 2,362,782 shares of the financial services provider’s stock valued at $135,269,000 after acquiring an additional 2,096,062 shares in the last quarter. Janus Henderson Group PLC increased its holdings in Arthur J Gallagher & Co by 8,471.3% during the 2nd quarter. Janus Henderson Group PLC now owns 1,852,944 shares of the financial services provider’s stock valued at $106,081,000 after acquiring an additional 1,831,326 shares in the last quarter. Vanguard Group Inc. increased its holdings in Arthur J Gallagher & Co by 3.2% during the 2nd quarter. Vanguard Group Inc. now owns 18,149,660 shares of the financial services provider’s stock valued at $1,039,067,000 after acquiring an additional 571,235 shares in the last quarter. Renaissance Technologies LLC increased its holdings in Arthur J Gallagher & Co by 927.7% during the 2nd quarter. Renaissance Technologies LLC now owns 408,000 shares of the financial services provider’s stock valued at $23,358,000 after acquiring an additional 368,300 shares in the last quarter. Finally, Victory Capital Management Inc. grew its holdings in shares of Arthur J Gallagher & Co by 7.7% during the fourth quarter. Victory Capital Management Inc. now owns 4,182,454 shares of the financial services provider’s stock worth $264,665,000 after buying an additional 297,388 shares in the last quarter. Hedge funds and other institutional investors own 81.49% of the company’s stock.

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About Arthur J Gallagher & Co

Arthur J. Gallagher & Co and its subsidiaries are engaged in providing insurance brokerage and consulting services, and third-party claims settlement and administration services to both domestic and international entities. The Company operates through three segments: brokerage, risk management and corporate.

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