AlphaMadera's AlphaVal page computes Arthur J. Gallagher & Co.'s fair value using a multi-method blend (DCF, comparable-multiples, and Graham-style intrinsic value), then compares it to the current market price to flag AJG as undervalued, fairly valued, or overvalued.

What is Arthur J. Gallagher & Co.'s fair value?

Fair value for AJG is a model output combining discounted cash flow projections, peer-group multiples, and a Graham number floor. The live AlphaVal page shows the blended fair value alongside each method's individual estimate.

How does AlphaMadera value AJG?

AlphaVal uses three primary techniques: a five-year discounted-cash-flow projection with terminal multiple, peer-group multiple analysis (P/E, EV/EBITDA, P/S), and Graham's defensive-investor intrinsic-value formula. Inputs come from AJG's most recent reported fundamentals.

AJG - Arthur J. Gallagher & Co.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $268.38 DETAILS

AlphaVal

Deterministic, archetype-aware fair value

Banks, Insurers & Asset Managers 85% confidence

Primary model: P/Tangible Book × ROE Quality

Valuation Signal Overvalued Strong

Trading 75.4% above fair value

Current Price $204.75

Bear Case $48.01 76.6% downside ($48.01 - $204.75) / $204.75 = -76.6% ROTCE 4.8% → 0.30x TBV

Fair Value $116.76 43.0% downside ($116.76 - $204.75) / $204.75 = -43.0% ROTCE 6.4% → 0.73x TBV

Bull Case $163.40 20.2% downside ($163.40 - $204.75) / $204.75 = -20.2% ROTCE 7.4% → 1.02x TBV

Adjust Assumptions

Return on Tangible Equity

6.4%

Cost of Equity

7.3%

Key Value Driver

ROTCE (6.4%) vs. cost of equity (7.3%)

Implied Market Multiple 2.26x

Plain-Language Summary

Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $268.38 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $116.76 per share.

Warnings

⚠ Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.

⚠ Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.

⚠ Return on equity (6.4%) is below the minimum investors require (7.3%). This means the bank is worth less than the net assets on its books.

ℹ Dividend-based valuation: $319.92 (383% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.

ℹ Wall Street's average price target is $268.38 (from 29 analysts). Our estimate is 75% below the consensus -- consider that gap carefully.

Key Risks

Book value quality matters as much as level — check loan loss reserves
Interest rate sensitivity creates non-linear earnings surprises
Insurance reserving is actuarial, not financial — errors emerge slowly