Arthur J. Gallagher & Co. (AJG) Rating Lowered to Sell at Zacks Investment Research
Arthur J. Gallagher & Co. (NYSE:AJG) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued 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.”
Other equities analysts also recently issued reports about the company. Barclays PLC upped their price target on Arthur J. Gallagher & Co. from $52.00 to $56.00 and gave the stock an “overweight” rating in a research report on Sunday. Compass Point upped their price target on Arthur J. Gallagher & Co. from $51.00 to $59.00 and gave the stock a “buy” rating in a research report on Friday, July 29th. JPMorgan Chase & Co. reaffirmed a “sell” rating and set a $45.00 price target on shares of Arthur J. Gallagher & Co. in a research report on Friday, July 29th. BMO Capital Markets reaffirmed an “outperform” rating and set a $58.00 price target (up from $52.00) on shares of Arthur J. Gallagher & Co. in a research report on Tuesday, July 12th. Finally, Credit Suisse Group AG reaffirmed a “buy” rating and set a $47.00 price target on shares of Arthur J. Gallagher & Co. in a research report on Monday, September 12th. Two analysts have rated the stock with a sell rating, three have issued a hold rating and ten have issued a buy rating to the stock. The company currently has an average rating of “Buy” and an average target price of $50.85.
Arthur J. Gallagher & Co. (NYSE:AJG) opened at 50.42 on Tuesday. The stock has a market capitalization of $8.93 billion, a P/E ratio of 22.86 and a beta of 1.17. Arthur J. Gallagher & Co. has a 52-week low of $35.96 and a 52-week high of $51.24. The company’s 50-day moving average price is $49.81 and its 200 day moving average price is $47.72.
Arthur J. Gallagher & Co. (NYSE:AJG) last issued its quarterly earnings data on Thursday, July 28th. The company reported $0.97 EPS for the quarter, topping analysts’ consensus estimates of $0.96 by $0.01. The company earned $1.43 billion during the quarter, compared to the consensus estimate of $1.44 billion. Arthur J. Gallagher & Co. had a net margin of 7.11% and a return on equity of 12.89%. Arthur J. Gallagher & Co.’s revenue for the quarter was up 4.1% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $0.93 earnings per share. On average, equities research analysts predict that Arthur J. Gallagher & Co. will post $2.77 earnings per share for the current fiscal year.
The firm also recently declared a quarterly dividend, which was paid on Friday, September 16th. Shareholders of record on Friday, September 2nd were issued a $0.38 dividend. This represents a $1.52 annualized dividend and a yield of 3.01%. The ex-dividend date of this dividend was Wednesday, August 31st. Arthur J. Gallagher & Co.’s payout ratio is 69.09%.
In other news, insider Susan E. Pietrucha sold 6,955 shares of the stock in a transaction dated Wednesday, September 7th. The shares were sold at an average price of $50.35, for a total transaction of $350,184.25. Following the sale, the insider now directly owns 6,955 shares of the company’s stock, valued at approximately $350,184.25. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. Also, Director Kay W. Mccurdy sold 6,000 shares of the stock in a transaction dated Monday, August 1st. The stock was sold at an average price of $49.19, for a total transaction of $295,140.00. Following the sale, the director now directly owns 37,095 shares in the company, valued at $1,824,703.05. The disclosure for this sale can be found here. 1.70% of the stock is currently owned by company insiders.
Large investors have recently bought and sold shares of the company. Vanguard Group Inc. raised its stake in 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 valued at $749,668,000 after buying an additional 2,987,125 shares during the last quarter. State Street Corp raised its stake in 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 valued at $371,397,000 after buying an additional 1,456,359 shares during the last quarter. Kleinwort Benson Investors Dublin Ltd purchased a new stake in Arthur J. Gallagher & Co. during the second quarter valued at about $37,142,000. Virginia Retirement Systems ET AL purchased a new stake in Arthur J. Gallagher & Co. during the second quarter valued at about $24,390,000. Finally, Royal Bank of Canada raised its stake in Arthur J. Gallagher & Co. by 381.0% in the second quarter. Royal Bank of Canada now owns 630,386 shares of the company’s stock valued at $30,008,000 after buying an additional 499,318 shares during the last quarter. 81.48% of the stock is currently owned by institutional investors and hedge funds.
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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