Insurance Data Spooks Analyst Amid Industry Jitters, Arthur J. Gallagher Loses Favor
Portfolio Pulse from Lekha Gupta
Truist Securities analyst Mark Hughes downgraded Arthur J. Gallagher & Co. (AJG) to Hold from Buy and lowered the price target to $255 from $280, citing industry data indicating a potential sharp downshift in the P&C cycle. This is expected to impact organic growth negatively. Hughes also adjusted EPS estimates downwards based on these projections. Investors can gain exposure to AJG through BCUS and GDIV ETFs. AJG shares fell 1.6% to $240.22.
April 10, 2024 | 6:04 pm
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NEUTRAL IMPACT
BCUS ETF offers exposure to AJG, which was downgraded due to concerns over the P&C cycle's impact on growth.
While BCUS ETF includes AJG in its holdings, the direct impact of AJG's downgrade on BCUS's performance may be diluted due to the diversified nature of the ETF's portfolio.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
GDIV ETF, which includes AJG, could be indirectly affected by the downgrade of AJG due to P&C cycle concerns.
GDIV ETF's exposure to AJG means that AJG's downgrade could have an indirect effect, though the diversified nature of ETF holdings may mitigate the impact.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Arthur J. Gallagher downgraded to Hold from Buy, with a price target reduction to $255 from $280 due to concerns over the P&C cycle's impact on growth.
The downgrade and price target reduction by Truist Securities reflect concerns over the P&C insurance cycle's impact on Arthur J. Gallagher's organic growth and earnings, leading to a negative short-term impact on the stock.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100