Aon Maintains Strong Underlying Growth in Q2

Narrow-moat Aon delivered another quarter of strong underlying growth in the second quarter, although it is modestly lagging its closest peer, Marsh McLennan, on this front. Reported revenue increased 3% year over year, or 8% on an organic, constant currency basis during the period as Aon continues to enjoy some near-term tailwinds. That said, the company averaged 4% growth on an organic, constant currency basis over the past decade, and we think a return to this level is inevitable. We will maintain our $250 per share fair value estimate for the firm. We see Aon's shares as somewhat overvalued, as we believe the market is overly focused on current growth levels.