Advertisement
Australia markets closed

  • ALL ORDS

    7,817.40
    -81.50 (-1.03%)
     

  • ASX 200

    7,567.30
    -74.80 (-0.98%)
     

  • AUD/USD

    0.6421
    -0.0004 (-0.07%)
     

  • OIL

    83.24
    +0.51 (+0.62%)
     

  • GOLD

    2,406.70
    +8.70 (+0.36%)
     

  • Bitcoin AUD

    99,724.94
    +3,398.24 (+3.53%)
     

  • CMC Crypto 200

    1,371.97
    +59.34 (+4.52%)
     

  • AUD/EUR

    0.6023
    -0.0008 (-0.13%)
     

  • AUD/NZD

    1.0893
    +0.0018 (+0.17%)
     

  • NZX 50

    11,796.21
    -39.83 (-0.34%)
     

  • NASDAQ

    17,037.65
    -356.67 (-2.05%)
     

  • FTSE

    7,895.85
    +18.80 (+0.24%)
     

  • Dow Jones

    37,986.40
    +211.02 (+0.56%)
     

  • DAX

    17,737.36
    -100.04 (-0.56%)
     

  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     

  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     

Surging Earnings Estimates Signal Upside for Arthur J. Gallagher (AJG) Stock

Zacks Equity Research
·2-min read

Arthur J. Gallagher (AJG) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.

The upward trend in estimate revisions for this insurance and risk-management company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Arthur J. Gallagher, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year.

ADVERTISEMENT

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The company is expected to earn $2.50 per share for the current quarter, which represents a year-over-year change of +23.76%.

Over the last 30 days, three estimates have moved higher for Arthur J. Gallagher compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 5.17%.

Current-Year Estimate Revisions

For the full year, the company is expected to earn $6.58 per share, representing a year-over-year change of +20.07%.

In terms of estimate revisions, the trend for the current year also appears quite encouraging for Arthur J. Gallagher. Over the past month, three estimates have moved higher compared to one negative revision, helping the consensus estimate increase 8.76%.

Favorable Zacks Rank

The promising estimate revisions have helped Arthur J. Gallagher earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

Arthur J. Gallagher shares have added 7.7% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Arthur J. Gallagher & Co. (AJG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research