Arthur J. Gallagher & Co. (AJG) Downgraded by Zacks Investment Research to Sell
Arthur J. Gallagher & Co. (NYSE:AJG) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued to investors on Tuesday.
According to Zacks, “Escalating expenses and the resultant adverse impact on margins, weak commercial P&C rates pose concerns for Arthur J. Gallagher. Also, the company has been witnessing downward estimate revisions for both 2016 and 2017, over the last 60 days. Nonetheless, the company remains focused on tapping opportunities in the U.K., Australia, New Zealand, Canada and the U.S. Contribution from international operations is expected to increase. The inorganic story seems impressive with continued strategic acquisitions, mainly within the brokerage segment. Riding on its operational strength, the company expects to deliver 15% earnings growth in 2016. A solid performance is leading to sufficient cash flows which will help it deploy capital in shareholder-friendly moves. Notably, the company has witnessed positive organic growth for 20 straight quarters.”
A number of other research analysts have also commented on AJG. Barclays PLC raised their price target on Arthur J. Gallagher & Co. from $52.00 to $56.00 and gave the company an “overweight” rating in a report on Sunday, October 2nd. Compass Point raised their price target on Arthur J. Gallagher & Co. from $51.00 to $59.00 and gave the company a “buy” rating in a report on Friday, July 29th. JPMorgan Chase & Co. reissued a “sell” rating and set a $45.00 price target on shares of Arthur J. Gallagher & Co. in a report on Friday, July 29th. BMO Capital Markets reissued an “outperform” rating and set a $58.00 price target (up from $52.00) on shares of Arthur J. Gallagher & Co. in a report on Tuesday, July 12th. Finally, Credit Suisse Group AG reissued a “buy” rating and set a $47.00 price target on shares of Arthur J. Gallagher & Co. in a report on Monday, September 12th. Two equities research analysts have rated the stock with a sell rating, three have issued a hold rating and ten have assigned a buy rating to the stock. The stock currently has a consensus rating of “Buy” and a consensus price target of $50.85.
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Arthur J. Gallagher & Co. (NYSE:AJG) opened at 50.57 on Tuesday. The firm has a 50-day moving average of $49.93 and a 200-day moving average of $47.79. Arthur J. Gallagher & Co. has a 12-month low of $35.96 and a 12-month high of $51.24. The stock has a market capitalization of $8.95 billion, a price-to-earnings ratio of 22.92 and a beta of 1.17.
Arthur J. Gallagher & Co. (NYSE:AJG) last posted its earnings results on Thursday, July 28th. The company reported $0.97 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.96 by $0.01. The company had revenue of $1.43 billion for the quarter, compared to analysts’ expectations of $1.44 billion. Arthur J. Gallagher & Co. had a return on equity of 12.89% and a net margin of 7.11%. The firm’s quarterly revenue was up 4.1% compared to the same quarter last year. During the same period last year, the business posted $0.93 earnings per share. Equities research analysts forecast that Arthur J. Gallagher & Co. will post $2.77 earnings per share for the current fiscal year.
The business also recently declared a quarterly dividend, which was paid on Friday, September 16th. Investors of record on Friday, September 2nd were given a $0.38 dividend. The ex-dividend date of this dividend was Wednesday, August 31st. This represents a $1.52 dividend on an annualized basis and a dividend yield of 3.01%. Arthur J. Gallagher & Co.’s dividend payout ratio (DPR) is 69.09%.
In other Arthur J. Gallagher & Co. news, Director Frank E. Jr. English sold 3,000 shares of the firm’s stock in a transaction dated Monday, September 19th. The stock was sold at an average price of $49.60, for a total transaction of $148,800.00. Following the completion of the sale, the director now directly owns 10,150 shares in the company, valued at approximately $503,440. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Norman L. Rosenthal sold 9,375 shares of the firm’s stock in a transaction dated Friday, August 5th. The stock was sold at an average price of $49.26, for a total value of $461,812.50. Following the sale, the director now owns 28,399 shares of the company’s stock, valued at $1,398,934.74. The disclosure for this sale can be found here. 1.70% of the stock is owned by corporate insiders.
A number of large investors have recently made changes to their positions in the company. Vanguard Group Inc. raised its stake in shares of Arthur J. Gallagher & Co. by 23.4% in the second quarter. Vanguard Group Inc. now owns 15,749,325 shares of the company’s stock worth $749,668,000 after buying an additional 2,987,125 shares during the last quarter. BlackRock Fund Advisors raised its stake in shares of Arthur J. Gallagher & Co. by 3.7% in the first quarter. BlackRock Fund Advisors now owns 9,040,640 shares of the company’s stock worth $402,128,000 after buying an additional 321,837 shares during the last quarter. State Street Corp raised its stake in shares of Arthur J. Gallagher & Co. by 22.9% in the second quarter. State Street Corp now owns 7,802,461 shares of the company’s stock worth $371,397,000 after buying an additional 1,456,359 shares during the last quarter. Goldman Sachs Group Inc. raised its stake in shares of Arthur J. Gallagher & Co. by 7.3% in the first quarter. Goldman Sachs Group Inc. now owns 4,097,757 shares of the company’s stock worth $182,269,000 after buying an additional 277,556 shares during the last quarter. Finally, Thomaspartners Inc. raised its stake in shares of Arthur J. Gallagher & Co. by 5.3% in the second quarter. Thomaspartners Inc. now owns 2,730,810 shares of the company’s stock worth $129,987,000 after buying an additional 136,673 shares during the last quarter. Hedge funds and other institutional investors own 81.48% of the company’s stock.
About Arthur J. Gallagher & Co.
Arthur J. Gallagher & Co is 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. The Company provides insurance, brokerage and risk management services to a range of commercial, industrial, institutional and governmental organizations through its operating segments.
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