Arthur J. Gallagher & Co. AJG is slated to report second-quarter 2024 earnings on Jul 25, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average beat being 2.25%.
Factors to Consider
Better performance in both segments, aided by new business, strong retention and increasing renewal premiums across its business lines, is likely to have benefited Arthur J. Gallagher’s second-quarter performance.
Revenues associated with acquisitions, the organic change in base commissions and fee revenues are likely to have favored commission and fee revenues in the second quarter of 2024. The Zacks Consensus Estimate for fees is pegged at $913.8 million, indicating an increase of 15.6% from the prior-year period’s reported number. The consensus mark for commissions is pegged at $1.6 billion, implying 15.7% growth from the prior-year period’s reported number.
The property and casualty brokerage operations are likely to have been aided by strong customer retention, higher new business generation and increasing renewal premiums in the to-be-reported quarter.
The risk management segment is likely to have been aided by solid new business, continued increases in new arising claims across both workers’ comp and liability and resilient customer business activity.
Net investment income in the to-be-reported quarter is likely to have benefited from an increase in interest income from higher interest rates earned on funds.
Higher commissions and fees, increased supplemental revenues, improved contingent revenues and investment income, as well as strategic mergers and acquisitions, are likely to have driven the top line in the to-be-reported quarter. The Zacks Consensus Estimate for second-quarter revenues is pinned at $2.76 billion, indicating an increase of 14.5% from the year-ago reported figure.
Total expenses are likely to have increased mainly because of higher compensation, operating costs, interest expenses, amortization, reimbursements and depreciation.
The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $2.24, indicating an increase of 17.8% from the year-ago reported figure.
What Our Quantitative Model Predicts
Our proven model predicts an earnings beat for Arthur J. Gallagher this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of +0.16%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Arthur J. Gallagher & Co. Price and EPS Surprise
Arthur J. Gallagher & Co. price-eps-surprise | Arthur J. Gallagher & Co. Quote
Zacks Rank: AJG currently carries a Zacks Rank #3.
Other Stocks to Consider
Some other insurance stocks with the right combination of elements to come up with an earnings beat this time around are:
Willis Towers Watson Public Limited Company WTW has an Earnings ESP of +1.85% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $2.28, indicating a year-over-year increase of 11.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
WTW’s earnings beat estimates in three of the last reported quarters and missed in one.
Marsh & McLennan Companies, Inc. MMC has an Earnings ESP of +2.36% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $1.61, indicating a year-over-year increase of 2.5%.
MMC’s earnings beat estimates in each of the last four reported quarters.
Reinsurance Group of America, Incorporated RGA has an Earnings ESP of +2.81% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2024 earnings is pegged at $4.94, indicating a year-over-year increase of 12.2%.
RGA’s earnings beat estimates in each of the last four reported quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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