In a report published Tuesday, Morgan Stanley analyst Kai Pan reiterated an Equal-Weight rating on Arthur J. Gallagher & Co. AJG.
In the report, Morgan Stanley noted, “We estimate 2014‐15e EPS CAGR of ~15% driven by: (1) ~20% revenue growth via M&A and organic growth in an improving economy (2) 270bps margin expansion, and (3) increasing Clean Coal tax credit. Strong fundamentals at AJG's are partially reflected in higher valuation expectations at 18x EPS, 11x EV/EBITDA, and 14x P/FCF on our 2014 estimates. Downside is protected somewhat by a 3%+ dividend yield.”
Arthur J. Gallagher & Co. closed on Monday at $44.69.
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