Aon Still Enjoying Some Tailwinds in Fourth Quarter

The stronger dollar reduced Aon’s reported growth in the fourth quarter, but underlying year-over-year growth of 5% remained solid. The company did modestly underperform its peer Marsh McLennan in terms of organic growth in the quarter, but for the most part, Aon still appears to be enjoying some tailwinds. We will maintain our $261 fair value estimate for the narrow-moat company. We think shares are a bit overvalued at the moment, as the market appears to be overly focused on the strong growth the company has seen recently, as opposed to the more modest level of growth we expect long term.