HomeAnalyst RatingsArthur J. Gallagher Downgraded to Neutral at Goldman Sachs

Arthur J. Gallagher [AJG] Downgraded to Neutral at Goldman Sachs

Goldman Sachs took its Arthur J. Gallagher [AJG] rating to the equivalent of Neutral from Buy, and the price target to $129.0 from $123, in a research note dated 2021-01-08. That figure represents around a 5.41% premium from where the company’s shares closed on Thursday. Some new analysts also started their coverage, with Evercore ISI’s analysts assigning the shares to “an Outperform” rating in a research note to investors issued in mid December. Meanwhile, Piper Sandler had raised its rating on AJG to “an Overweight” from the earlier “Neutral”, in a research note produced for clients November 02, 2020. In addition, there was a downgrade from BofA Securities on August 21, 2020. The rater changed AJG from “a Buy” to “an Underperform”.

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Is Arthur J. Gallagher & Co. [NYSE:AJG] a Good Buy Right Now?

It should be noted that AJG technical indicators for short, intermediate as well as long term progress have placed an overall average of 80% as Buy. The average signal changed from 100% Buy in the last week and compares with 100% Buy in the past month. Data from Arthur J. Gallagher & Co.’s Trend Spotter indicated that the signals were Bullish. The stock current average is 0.78 million shares in the past 20 days and the short term average signal indicates a 50% Buy. In the last 50 days, the average trading volume was 0.89 million shares while the medium term average advocated for 100% Buy. The average long-term signal stands at 100% Buy and the 100-day average volume stands at 0.85 million shares.

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AJG Price Performance

On Wall Street, Arthur J. Gallagher & Co. [NYSE:AJG] finished Thursday’s session up 0.33% at $122.33. The stock went up to $123.63 at the same session while its lowest single day price was $121.7701. In the last five days, it saw a rise of about 0.52%, Arthur J. Gallagher & Co. shares dropped by almost -1.12% since the beginning of the year. However, the share price has dropped to as low as -5.26% below its one year high. On 01/04/21, the company shares recorded $123.71, the highest single-day price it has got to in the last 52-weeks and a 52-week low was seen on 01/05/21, the same year at $118.87. The company’s shares have inclined by 28.97% in the past year. The 50-day SMA achieved is $116.77 while the 200-day SMA is $101.96. Volume dropped to 0.74 million from 0.86 million in the previous session.

Arthur J. Gallagher & Co. [AJG] Valuation Measures

Notably, Arthur J. Gallagher & Co. [AJG] stock cannot be classified as a good candidate in the listing of underestimated low-priced Insurance Brokers companies to purchase soonest possible with the prevailing 12-month PE ratio of 31.98. The measure means the stock is exchanging at a premium as compared to the 13.51x trailing earnings of the industry. It can be helpful for investors to consider historical price-sales ratio, more specifically, a 3.30 PS value ratio is reported for the last one year of reported earnings. That is higher than the industry average of 1.07 which means AJG serve an unattractive investment opportunity compared to its competitors.

AJG Stock Support And Resistance Levels

On the 24-hour scale, the immediate backing is perceived around 121.52 level, and in case of violation of this particular level, it will cause more drop to 120.72 level. On the upper level, 124.44 is still the key resistance. The stock may increase to the subsequent resistance at 123.38. The Relative Strength Index (RSI) pinned on the 14-day chart is 55.53, implying a neutral technical stance while the MACD stands at -1.82, meaning price will decrease in the next trading period. Percent R indicator moved to 66.24%, implying low price movement. Stochastic %K at 23.06% suggest selling the stock.

What is the short interest in Arthur J. Gallagher & Co.?

Short interest in the Arthur J. Gallagher & Co. stock has surged, increasing by 10000.0 shares to total 1.39 million shares on Dec 14, 2020. The interest had seen shares on Nov 12, 2020 stand at 1.4 million, data from Yahoo Finance shows. The decrease of -0.72% suggests the stock saw some decreased bullish sentiment. The stock’s days to cover (short ratio) moved to while the shorted shares account for just 0.93% of the overall float for the stock.

Arthur J. Gallagher & Co.’s Biggest Shareholders: Who Owns Arthur J. Gallagher & Co. [AJG]?

Filings by The Vanguard Group, Inc. showed that the firm now holds a total of 20,432,247 shares or roughly 10.62% of the outstanding AJG shares. This means their shares have reduced by -435,908 from the 20,432,247 the investor reportedly held in its prior 13-F filing. With the conclusion of the sale, BlackRock Fund Advisors updated stake is worth $1,330,309,835. Details in the latest 13F filings reveal that SSgA Funds Management, Inc. disposed off their -1.08% stake valued at $986,723,185 while Baillie Gifford & Co. cut theirs at $943,754,542. During the last quarter, SSgA Funds Management, Inc. liquidated -93,627 of its shares in Arthur J. Gallagher & Co. while Baillie Gifford & Co. sold -136,955 shares. The Brown Brothers Harriman & Co.’s holdings currently number 4,318,462 shares at $528277456.46. According to the firm’s last 13F report, Capital Research & Management Co shares in the company at filing stood at 4,296,767 shares, roughly $495,889,879.

AJG Earnings Forecast For The Current Quarter

Arthur J. Gallagher & Co. [AJG] is expected to report strong earnings results for the quarter ending on Dec 2020. Consensus estimates give the company expected revenues of $1.45B and an earnings per share of $0.77 for Dec 2020. Looking further ahead, the company is expected to report revenue of $1.76B at an EPS of $1.88 for Mar 2021. The estimates represent upside of 8.80% and 2.06% in the company’s revenue and earnings per share, respectively, on a year-on-year basis.

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AJG Earnings Estimates For The Current Year

For the financial year, Arthur J. Gallagher & Co. [NYSE:AJG] is expected to bring in revenue of $6.04B. The returns are nearly $380.0 million higher than the company’s actual revenue recorded in the fiscal year 2019. In terms of EPS for the 2020, estimate put it at 4.62, higher than that of FY19 by $0.96. Estimates put this year’s earnings growth at 26.20%, 2.40% for the next, and at an annual 11.12% over the next 5-year period. As for sales, forecasts are for an increase of 6.70% in the current fiscal year and a further 8.80% over the following year.

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