Core Insights - Arthur J. Gallagher & Co. (NYSE: AJG) is recognized as one of the 13 Best Long Term Low Risk Stocks to Buy Now [1] Group 1: Analyst Ratings and Price Targets - Citigroup raised its price objective for AJG to $280 from $277 while maintaining a Neutral rating [2] - UBS slightly reduced its price target for AJG to $283 from $285, also keeping a Neutral view on the shares [3] - UBS anticipates that insurance brokers will be well-positioned heading into 2026, with expected organic revenue growth averaging about 4.4% and improving EBITDA margins year over year [3] Group 2: Recent Acquisitions - On February 3, AJG announced the acquisition of 3D Advisors, a brokerage general agency based in Shelby Township, Michigan, with financial terms undisclosed [4] - 3D Advisors specializes in life insurance, annuity, and long-term care solutions for financial advisors, and its leadership will continue operating under AJG's management [5] Group 3: Company Overview - Arthur J. Gallagher & Co. is a global insurance brokerage, risk management, and consulting firm headquartered in Rolling Meadows, Illinois, operating in approximately 130 countries [6]

2nd Quarter Fiscal 2026 Earnings Presentation February 5, 2026 | We shop. You save. Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continu ...

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Core Insights - Willis Towers Watson (WTW) reported fourth-quarter 2025 adjusted earnings of $8.12 per share, exceeding the Zacks Consensus Estimate by 2.5%, with a year-over-year increase of 2% [1] - The quarterly results were supported by expanded operating margins in the Health, Wealth & Career and Risk & Broking segments, along with reduced expenses [1] Operational Update - WTW's adjusted consolidated revenues were $2.9 billion, reflecting a 3% decline year over year on a reported basis, but a 6% increase on an organic basis; the top line also beat the Zacks Consensus Estimate by 2.5% [2] - Total service costs decreased by 10% year over year to $1.9 billion, attributed to lower operating expenses, amortization, and transaction costs [2] Financial Performance - Adjusted operating income was $1 billion, down 1% year over year, with a margin expansion of 80 basis points to 36.9% [3] - Adjusted EBITDA was $1.12 billion, a 3% decrease year over year, with an adjusted EBITDA margin of 38.2%, which expanded by 30 basis points [3] Segment Performance - Health, Wealth & Career segment revenues totaled $1.6 billion, down 11% year over year, but beat estimates by 0.6%; organic growth was driven by strong client retention and healthcare inflation [4] - Wealth segment saw organic revenue growth from robust Retirement work and new product offerings, while Career segment growth was fueled by demand for advisory services and compensation benchmarking [5] - Risk & Broking segment revenues rose 10% year over year to $1.2 billion, exceeding estimates by 4.9%, driven by new business activity and strong client retention [6][8] Financial Update - As of December 31, 2025, cash and cash equivalents were $3.1 billion, a 65.7% increase from the end of 2024; long-term debt rose 8.4% to $5.7 billion [10] - Free cash flow for 2025 increased by 22% year over year to $1.55 billion, primarily due to operating margin expansion [11] Future Outlook - WTW anticipates a 10 cents dilution to adjusted EPS in 2026 from the Newfront acquisition, with projected post-close revenues of $250 million and an adjusted EBITDA margin of 26% [12] - The company expects continued annual margin expansion at the enterprise level, with a foreign currency tailwind on adjusted diluted EPS of 30 cents in 2026 [13] - Share repurchases of $1.0 billion or more are planned, subject to market conditions [14] Full-Year Highlights - For the full year, adjusted earnings were $17.08 per share, beating estimates by 1.2%, with total revenues declining 2% year over year to approximately $9.7 billion, also exceeding estimates by 0.6% [15]

Core Insights - The company achieved adjusted diluted earnings per share (EPS) of $17.08 for the full year, reflecting a 13% increase year over year when excluding the contribution from TRANZACT [1][20] - For 2025, the company reported organic growth of 5% and expanded adjusted operating margin by 130 basis points to 25.2% [1][19] - The fourth quarter saw a 6% organic growth in health, wealth, and career segments, with a notable 10% growth in career services [2][23] Financial Performance - Adjusted EPS for the fourth quarter was $8.12, marking a 13% increase year over year when excluding TRANZACT [2][19] - The company generated free cash flow of $1.5 billion for the year, an increase of $279 million from the previous year, resulting in a free cash flow margin of 15.9% [34] - The adjusted operating margin for the fourth quarter was 36.9%, an 80 basis point improvement year over year [32] Segment Performance - Health, wealth, and career revenue grew 6% in the fourth quarter, with health business achieving 4% growth [20][21] - The corporate risk and broking (CRB) segment recorded 8% organic growth in the fourth quarter, continuing a trend of high single-digit growth [5][27] - The wealth segment saw strong growth driven by increased retirement work globally, with expectations for high single-digit growth in 2026 [22][66] Strategic Initiatives - The company is focused on enhancing efficiency through its enterprise delivery organization and investments in technology, which are expected to drive further margin expansion [2][11] - Recent acquisitions, including Newfront, Cushion, and Flowstone Partners, are aimed at optimizing the company's portfolio for growth and profitability [2][13] - The company plans to allocate at least $1 billion to share repurchases in 2026, reflecting a balanced capital allocation approach [36][71] Market Outlook - The company anticipates continued strong demand across its global business, driven by healthcare inflation and employers' focus on managing costs while maintaining competitive employee benefits [21][62] - For 2026, the company expects mid-single-digit organic growth across its segments, supported by ongoing investments in talent and technology [17][50] - The company is optimistic about its position in the market and the potential for synergies from recent acquisitions over the next three years [15][17]

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved 6% organic growth, with an adjusted operating margin expansion of 80 basis points, and adjusted EPS of $8.12, reflecting a 13% increase year-over-year when excluding TRANZACT [5][18] - For the full year, organic growth was 5%, with adjusted operating margin expanding by 130 basis points to 25.2%, and adjusted diluted EPS of $17.08, also up 13% year-over-year excluding TRANZACT [5][18] Business Line Data and Key Metrics Changes - Health, Wealth and Career (HWC) segment saw organic growth accelerate to 6% in Q4, with a full-year growth of 4% [5][19] - Risk and Broking (R&B) generated 7% organic growth in Q4, with corporate Risk and Broking achieving 8% growth, marking the 12th consecutive quarter of high single-digit growth [6][25] - The insurance consulting and technology business experienced a decline of 1% in Q4, with full-year growth at 1% compared to 4% the previous year [26] Market Data and Key Metrics Changes - The international market drove growth in the health segment, particularly in Europe, while North America faced challenges due to a book of business sale in the prior year [20] - The company expects strong demand across global markets, driven by healthcare inflation and employers' focus on managing costs while maintaining competitive employee benefits [20][66] Company Strategy and Development Direction - The company is focused on optimizing its portfolio through strategic acquisitions, including Newfront, Cushon, and FlowStone Partners, to enhance growth and profitability [4][15] - The specialization strategy in Risk and Broking continues to drive new business momentum, particularly in construction and surety [6][25] - Investments in talent and technology are central to the company's strategy, with a focus on enhancing efficiency and driving margin expansion [11][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position and outlook for 2026, anticipating mid-single-digit organic growth and continued margin expansion [16][30] - The political and regulatory environment remains dynamic, prompting clients to seek the company's advice and solutions [16] - While optimistic about current conditions, management is monitoring potential headwinds for the upcoming year [16] Other Important Information - The company generated free cash flow of $1.5 billion for the year, with a free cash flow margin of 15.9%, an increase from 12.8% the previous year [31] - Share repurchases are a primary method of capital return, with at least $1 billion expected to be allocated to buybacks in 2026 [32] Q&A Session Summary Question: Drivers of organic growth within R&B - Management highlighted strong organic growth of 7% in R&B, driven by specialization strategy and investments in talent, data, and technology [37][39] Question: Mid- to high single-digit guidance for R&B in 2026 - Management acknowledged that while pricing may improve, growth is supported by high retention rates and new business opportunities, particularly in digital infrastructure and electrification [40][42] Question: Impact of talent on organic growth in 2026 - The company plans to continue strategic hiring to support organic growth, emphasizing the importance of talent in driving sustainable and profitable growth [52][54] Question: Changes in Medicare influencing BD&O growth - Management expects modest headwinds from Medicare changes but anticipates strong demand for retiree marketplace services to support low single-digit growth in 2026 [60][61] Question: AI's impact on consulting services - Management views AI as an opportunity rather than a threat, focusing on regulatory-driven recurring services that are expected to remain in demand [74]

Group 1 - Brown & Brown, Inc. (NYSE:BRO) is recognized as one of the 7 Best Low-Risk Dividend Stocks to Invest in [1] - The company operates as an insurance broker, focusing on risk management across property, casualty, and employee benefits insurance products [2] - BMO Capital reduced its price target for Brown & Brown from $88 to $81 while maintaining a 'Market Perform' rating, noting the stock appears discounted compared to its historical P/E ratio with the S&P 500 [3] Group 2 - Brown & Brown reported a higher adjusted profit for Q4, driven by a 36% year-over-year increase in commissions and fees, totaling $1.58 billion [4][5] - Total revenue for the quarter reached $1.61 billion, up from $1.18 billion in the same quarter last year, while organic revenue decreased to $1.08 billion from $1.11 billion year-over-year [4][5] - Adjusted earnings per share increased to $0.93, up from $0.86 in the prior-year period [5]

Core Viewpoint - Truist has reduced its price target for Arthur J. Gallagher & Co. (AJG) to $271 from $280, maintaining a Hold rating due to valuation pressures in the property and casualty (P&C) brokerage sector, while still considering the stock fairly valued at its current multiple [2]. Financial Performance - Arthur J. Gallagher & Co. reported a 24.5% increase in adjusted fourth-quarter profit, driven by stronger commissions and fees as demand for insurance remained robust [3]. - Commissions for the quarter reached $2.06 billion, up from $1.50 billion a year earlier, while total fees increased nearly 34.8% to $1.2 billion [4]. - The adjusted net profit for the three months ending December 31 was $620 million, or $2.38 per share, compared to $498 million, or $2.16 per share, in the same period last year [5].

Core Insights - Aon demonstrated strong execution in 2025, achieving sustained organic revenue growth, margin expansion, and rising free cash flow, with a positive outlook for 2026 [5][6][20] Financial Performance - For the full year, Aon reported organic revenue growth of 6%, consistent for the second consecutive year, with a total revenue of $4.3 billion in Q4, reflecting a 4% year-over-year increase [1][6] - Adjusted operating margin expanded by 220 basis points to 35.5% in Q4, while adjusted EPS rose by 10% to $4.85 [6] - Free cash flow increased by 16%, with expectations of double-digit growth continuing into 2026 [6][20] Strategic Initiatives - The company achieved $160 million in restructuring savings, exceeding its plan by $10 million, with $50 million of these savings realized in Q4 [1] - Aon's "3x3 plan" aims to integrate risk capital and human capital, expand client leadership, and leverage Aon Business Services (ABS) for improved capabilities and efficiency [4][5] Business Segments Performance - Commercial risk and reinsurance segments both delivered growth of 6% or better in Q4, driven by new business and strong retention [7] - Reinsurance grew by 8%, supported by double-digit growth in insurance-linked securities and strong facultative placements [8] - Health solutions and wealth segments each grew by 2%, with health solutions benefiting from core offerings in the U.S. and EMEA [9] Talent and Integration - Aon emphasized talent as a key growth driver, reporting a net increase of 6% in revenue-generating talent in 2025, with plans to expand this by another 4%-8% in 2026 [10] - The integration of NFP is progressing, with significant milestones achieved and a focus on disciplined portfolio management [12] Capital Management - Aon paid down $1.9 billion of debt in 2025, lowering its leverage ratio to 2.9x, and returned $1.6 billion to shareholders, including $1 billion in share repurchases [13] - The company anticipates repurchasing at least $1 billion of shares in 2026 while maintaining flexibility for potential M&A opportunities [14] 2026 Outlook - Aon projects continued mid-single-digit organic growth, margin expansion, and double-digit free cash flow growth for 2026, with specific guidance on adjusted EPS and margin outlook [15][20]

Core Insights - Arthur J. Gallagher & Co. (AJG) reported fourth-quarter 2025 adjusted net earnings of $2.38 per share, exceeding the Zacks Consensus Estimate by 1.2% and reflecting an 11.7% year-over-year increase [1][8] - The company's performance was bolstered by margin expansion in the Risk Management segment, increased commissions, fees, supplemental revenues, and improved EBITDAC [1][8] Operational Update - Total revenues reached $3.6 billion, surpassing the Zacks Consensus Estimate by 0.3% and showing a 33.8% year-over-year growth, driven by higher commissions, fees, supplemental revenues, and contingent revenues [2][8] - Total expenses rose 44.7% year over year to $3.4 billion, attributed to increased compensation, operating costs, reimbursements, interest, depreciation, and amortization [2] Earnings Metrics - Earnings before interest, tax, depreciation, and amortization (EBITDAC) grew 3.3% year over year to $710 million [3] Segmental Results - Brokerage segment revenues increased 38% year over year to $3.2 billion, driven by higher commissions and fees [4] - Expenses in the brokerage segment rose 46.7% year over year to $2.7 billion, with adjusted EBITDAC climbing 32% to $1 billion, although the margin contracted by 80 basis points to 32.2% [4] - Risk Management segment revenues increased 13% year over year to $417 million, with expenses rising 12.9% to $392 million, leading to an adjusted EBITDAC improvement of 16.8% to $90 million and a margin expansion of 90 basis points to 21.6% [5] Financial Update - As of December 31, 2025, total assets were $70.6 billion, a 10% increase from the previous year, with cash and cash equivalents rising 90.6% to $1.4 billion [6] - Shareholders' equity increased 15.6% to $23.3 billion compared to December 31, 2024 [6] Dividend Update - The board declared a quarterly cash dividend of 70 cents per share, a 7.6% increase from the previous dividend of 65 cents, payable on March 20, 2026 [7] Acquisition Update - In the quarter, the company closed six acquisitions with estimated annualized revenues of approximately $118 million [9] Full-Year Update - For the full year, total revenues increased 20.6% year over year to $13.7 billion, slightly missing the consensus estimate by 0.1% [10] - The company completed 31 acquisitions in 2025, with estimated annualized revenues of $3.5 billion, and adjusted earnings for the year were $10.69 per share, up 5.8% year over year, beating the Zacks Consensus Estimate by 0.2% [10]