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What's in Store for Arthur J. Gallagher (AJG) in Q2 Earnings?
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Arthur J. Gallagher & Co. (AJG - Free Report) is slated to report second-quarter 2023 earnings on Jul 27, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average beat being 1.96%.
Factors to Consider
Solid results in both segments aided by new business, strong retention and renewal premium increases across its business lines are likely to benefit Arthur J. Gallagher’s second-quarter results.
Revenues associated with acquisitions and organic revenue growth, organic change in base commissions and fee revenues are likely to have favored commission and fee revenues in the second quarter of 2023. The Zacks Consensus Estimate for fees is pegged at $674 million, indicating an increase of 14% from the prior-year period’s reported number. The consensus mark for commissions is pegged at $1.5 billion, implying 16.2% growth from the prior-year period’s reported number.
We estimate fees of $638.3 million, up 8% and commission of $1.5 billion, up 16.6% in the to-be-reported quarter.
The employee benefit brokerage and consulting business is likely to have been aided by new business and strong retention.
Net investment income in the to-be-reported quarter is likely to have benefited from increases in interest income from higher interest rates earned on funds and fiduciary cash. We expect an investment income of $48.1 million in the to-be-reported quarter. The Zacks Consensus Estimate for net investment income is pegged at $46.7 million.
Organic commission, fee, supplemental revenues, contingent revenues, 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 $2.3 billion, indicating an increase of 17.3% from the year-ago reported figure.
Total expenses are likely to have increased mainly because of higher compensation, operating costs, reimbursements, interest expenses, depreciation and change in estimated acquisition earnout payables. We expect total expenses to increase 19.9% to $2 billion in the to-be-reported quarter.
The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.87, indicating an increase of 10% from the year-ago reported figure.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Arthur J. Gallagher this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case, as you can see here.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of -1.38%. This is because the Most Accurate Estimate of $1.84 is pegged lower than the Zacks Consensus Estimate of $1.87. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AJG currently carries a Zacks Rank #2.
Stocks to Consider
Here are three insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
American Equity Investment Life Holding Company has an Earnings ESP of +1.70% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.67, indicating a year-over-year increase of 70.4%.
AEL’s earnings beat estimates in three of the last four quarters and missed in the other one.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $3.55, indicating a year-over-year increase of 7.9%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
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What's in Store for Arthur J. Gallagher (AJG) in Q2 Earnings?
Arthur J. Gallagher & Co. (AJG - Free Report) is slated to report second-quarter 2023 earnings on Jul 27, after market close. The insurer delivered an earnings surprise in each of the last four reported quarters, the average beat being 1.96%.
Factors to Consider
Solid results in both segments aided by new business, strong retention and renewal premium increases across its business lines are likely to benefit Arthur J. Gallagher’s second-quarter results.
Revenues associated with acquisitions and organic revenue growth, organic change in base commissions and fee revenues are likely to have favored commission and fee revenues in the second quarter of 2023. The Zacks Consensus Estimate for fees is pegged at $674 million, indicating an increase of 14% from the prior-year period’s reported number. The consensus mark for commissions is pegged at $1.5 billion, implying 16.2% growth from the prior-year period’s reported number.
We estimate fees of $638.3 million, up 8% and commission of $1.5 billion, up 16.6% in the to-be-reported quarter.
The employee benefit brokerage and consulting business is likely to have been aided by new business and strong retention.
Net investment income in the to-be-reported quarter is likely to have benefited from increases in interest income from higher interest rates earned on funds and fiduciary cash. We expect an investment income of $48.1 million in the to-be-reported quarter. The Zacks Consensus Estimate for net investment income is pegged at $46.7 million.
Organic commission, fee, supplemental revenues, contingent revenues, 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 $2.3 billion, indicating an increase of 17.3% from the year-ago reported figure.
Total expenses are likely to have increased mainly because of higher compensation, operating costs, reimbursements, interest expenses, depreciation and change in estimated acquisition earnout payables. We expect total expenses to increase 19.9% to $2 billion in the to-be-reported quarter.
The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $1.87, indicating an increase of 10% from the year-ago reported figure.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Arthur J. Gallagher this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case, as you can see here.
Earnings ESP: Arthur J. Gallagher has an Earnings ESP of -1.38%. This is because the Most Accurate Estimate of $1.84 is pegged lower than the Zacks Consensus Estimate of $1.87. 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 #2.
Stocks to Consider
Here are three insurance stocks you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat:
Assurant, Inc. (AIZ - Free Report) has an Earnings ESP of +0.52% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $2.60, indicating a year-over-year decline of 11.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
AIZ’s earnings beat estimates in three of the last four quarters and missed in the other one.
American Equity Investment Life Holding Company has an Earnings ESP of +1.70% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $1.67, indicating a year-over-year increase of 70.4%.
AEL’s earnings beat estimates in three of the last four quarters and missed in the other one.
Brighthouse Financial, Inc. (BHF - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for second-quarter 2023 earnings is pegged at $3.55, indicating a year-over-year increase of 7.9%.
BHF’s earnings beat estimates in two of the last four quarters and missed in the other two.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.