On Oct 1, Zacks Investment Research upgraded
Arthur J Gallagher & Co
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
Arthur J Gallagher & Co. has been witnessing rising earnings
estimates on the back of its impressive inorganic growth story.
Moreover, with respect to its earnings performance this insurance
broker delivered positive earnings surprises in 3 of the last 4
quarters, with an average beat of 8.7%. The long-term expected
earnings growth rate for this stock is 13%.
The Zacks Consensus Estimate for 2013 increased 0.5% to $2.21 per
share as 4 of 12 estimates were revised higher over the last 30
days. For 2014, the same number of estimates moved north over the
same time frame, lifting the Zacks Consensus Estimate by 1.6% to
$2.59 per share.
Arthur J. Gallagher & Co. undertakes acquisitions to augment
its product and service offerings as well as to expand its
international exposure. The company made six acquisitions in the
third quarter. This also compares favorably with five
acquisitions (with annualized revenues totaling $35.9 million)
closed successfully in the preceding quarter. Arthur J. Gallagher
& Co.'s strong financial position continues to support its
The series of recent acquisitions include adding New York-based
fine arts broker team of Jeffrey Haber and Michael Fischman;
Kent, England-based Belmont International; Eau Claire, Wis.-based
R. W. Scobie, Inc.; and, London-based Giles Group of Companies to
its portfolio. In August, Arthur J. Gallagher & Co added
Ottawa, Ontario-based Dickinson & Associates, Inc. and Short
Hills, N.J.-based Bollinger, Inc.
In the last reported quarter, Arthur J Gallagher & Co. posted
earnings of 73 cents, 5.8% above the Zacks Consensus Estimate. We
expect Arthur J. Gallagher & Co. to deliver another positive
earnings surprise when it reports its third quarter results. This
is because our proven model shows that the insurance broker has
the right combination of a positive
and Zacks Rank. Expected Surprise Prediction or ESP, which
represents the difference between the Most Accurate Estimate and
the Zacks Consensus Estimate, is +3.23%.
Other Stocks to Consider
Brown & Brown Inc
) with a Zacks Rank #1 (Strong Buy) and
), both with a Zacks Rank #2 (Buy) are worth considering.
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