Macro Headwinds Continue for Arthur J. Gallagher (AJG); Piper Jaffray Cuts Price Target to $54

Piper Jaffray maintained an Overweight rating on Arthur J. Gallagher (NYSE: AJG), and cut the price target to $54.00 (from $56.00), due to macro headwinds. The stock has underperformed the group YTD in part due to higher share issuance to fund an increased M&A. Strong cash flow growth should be driven by operating earnings growth, declining integration charges, increasing clean energy cash and reduced headwind from working capital items.

Analyst Daniel Farrell commented, "While we are reducing estimates moderately due largely to some continued macro headwinds impacting the broader group, we continue to feel AJG will show strong free cash flow growth. The stock has underperformed the group YTD in part due to higher share issuance to fund an increased M&A. However, with increasing cash generation we do not expect the need for any meaningful share issuance going forward. We feel current valuation is attractive with the stock trading at a discount to peers and historical levels. Our rating remains Overweight."

For an analyst ratings summary and ratings history on Arthur J. Gallagher click here. For more ratings news on Arthur J. Gallagher click here.

Shares of Arthur J. Gallagher closed at $43.23 yesterday.

You May Also Be Interested In

• Hertz Global (HTZ) PT Lowered to $6 at Deutsche Bank
• Badger Meter (BMI) PT Raised to $175 at Stifel
• National Grid (NG:LN) (NGG) PT Raised to GBP12.75 at JPMorgan