Arthur J. Gallagher's 2025 Results and 2026 Outlook: Undervalued Despite High P/E Ratio

Arthur J. Gallagher (AJG) reported strong Q4 and FY25 results, driven by top-line growth and M&A activity. The company's share price has declined 19.93% over the past year, but its 5-year total shareholder return of 119.80% indicates long-term momentum. AJG's valuation is now seen as undervalued, with a narrative fair value of $293.56, driven by earnings and margin assumptions. However, a high P/E ratio of 42.2x and risks such as property and casualty pricing softening or integration challenges could challenge this valuation story.