Company Reports

Aon saw its growth slow in the first quarter, with organic revenue growth of just 5% year over year. While this lags what we've seen from peers, we expect growth to moderate for all of the brokers going forward, and Aon may just be seeing this process play out a bit more quickly. All in all, results for the quarter were roughly in line with what we expect from Aon over the long run. We will maintain our $301 fair value estimate for the narrow-moat company and see the shares as about fairly valued right now.

Aon historically has demonstrated modest growth and strong and stable free cash flow, and we expect much of the same going forward, although swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon finished the year on a solid note as growth accelerated slightly in the fourth quarter, with the company also closing the gap on its closest peer. In the quarter, overall revenue was up 8% year over year on a reported basis and 7% on an organic basis. We think Aon continues to benefit from some tailwinds, but the company will ultimately return to the low- to mid-single-digit growth it has generated historically. We will maintain our $291 per share fair value estimate for the narrow-moat company and see the shares as fairly valued.

Aon announced that it intends to acquire NFP, an insurance broker focused on middle-market clients. The price will be $13.4 billion, with $7 billion in cash and the rest in Aon shares. Aon has a history of significant mergers and acquisitions, and we had wondered what management might do after regulators blocked its attempt to acquire Willis Towers Watson. The answer appears to be to look for similar but somewhat smaller deals. While we would have preferred to see the company shift toward a focus on organic opportunities, we are pleased to see that Aon is not trying to expand into unrelated areas. We see the strategic fit as reasonable, if not especially compelling. NFP has a similar mix of business as Aon but is weighted more toward the consulting side.

Aon reported solid third-quarter results that reflect a favorable industry backdrop, but its results continue to lag its closest peer. Overall revenue grew 10% year over year, or 6% on an organic basis. Organic growth is still a bit above what we expect long-term. We will maintain our $291 fair value estimate for the narrow-moat company and see shares as slightly overvalued.

Aon historically has demonstrated modest growth and strong and stable free cash flow, and we expect much of the same going forward, although swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon continued to produce good results in the second quarter as the company continues to benefit from multiple tailwinds across its business. However, results also continue to lag what we're seeing from the company's closest peer, Marsh McLennan. We appreciate Aon's strong near-term position, but historically the company has produced only modest growth, and we think a return to more normalized growth is inevitable. We think that the market is overly focused on near-term prospects, and the shares are overvalued as a result. We will maintain our $275 per share fair value estimate for the narrow-moat company.

Aon continued to generate solid results in the first quarter, with the company seeing relatively strong growth relative to its historical performance, and margin improvement. But overall year-over-year organic growth of 7%, while healthy, falls a bit short of what we saw from peers. Further, we believe that a return to more modest growth is coming. We will maintain our $275 fair value estimate for the narrow-moat company and see shares as modestly overvalued.

Aon historically has demonstrated modest growth and improving margins, and we expect much of the same going forward, although swings in the insurance market and the pandemic have created some recent ups and downs. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

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.

Aon historically has demonstrated modest growth and improving margins, and we expect much of the same going forward, although the pandemic has created some ups and downs recently. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon reported solid underlying growth in the third quarter, although the pace of growth lagged peers a bit. Overall revenue was basically flat year over year on a reported basis and up 5% on an organic basis. Still, we've expected the company's growth to start to slow down, and growth in the quarter was in line with our long-term expectations. We will maintain our $250 fair value estimate and narrow moat rating.

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.

Narrow-moat Aon continued to post relatively strong growth in the first quarter. Revenue increased 8% year over year on an organic basis as the company continues to benefit from some industry tailwinds. Still, growth in the quarter modestly lagged what we saw from peer Marsh McLennan. Aon and its peers have achieved only modest organic growth historically. This is our expectation over the long term, and management’s guidance suggests growth may start to moderate going forward. We will maintain our $250 fair value estimate. While we think there is a lot to like about Aon’s business, we believe the shares are currently a bit overvalued, as the market price appears to be overly focused on recent results.

Aon historically has demonstrated modest growth and improving margins, and we expect much of the same going forward, although the pandemic has created some ups and downs recently. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon had an excellent year and maintained its momentum through the fourth quarter. For the quarter and the full year, Aon achieved 10% and 9% year-over-year revenue growth, respectively, excluding currency impacts and acquisitions, and also solid margin improvement. However, the company has achieved only modest organic growth historically, and this is our expectation over the long term, although we think growth in 2022 could remain relatively strong compared with historical levels. We will maintain our $236 fair value estimate and narrow moat rating. While Aon is a fundamentally attractive franchise, we believe the market is overly focused on the company’s recent results and near-term prospects.

In recent years, Aon has demonstrated modest growth and improving margins, and we expect much of the same going forward, although the pandemic has created some ups and down recently. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.

Aon’s unusually strong growth continued in the third quarter, with the company realizing its highest level of organic growth in over a decade. We saw similar results at the company’s closest peer. The narrow-moat company has benefited this year from higher insurance market pricing and the macroeconomic rebound, and these tailwinds have combined with easy comparisons to produce outsize growth. However, the company has achieved only modest organic growth historically, which is what we expect over the long term. We will maintain our $220 fair value estimate. We continue to believe the shares are materially overvalued and that the market is overly focused on near-term prospects for Aon and the other leading brokers.

Like its peers, Aon reported unusually strong growth in the second quarter, as the company benefited from both strong insurance market pricing and the bounceback in the economy. Overall revenue was up 16% year over year in the quarter, or 11% excluding currency impacts and acquisitions. We think near-term tailwinds and easy comparisons will drive outsized growth for the company this year, but would caution that modest and stable organic growth has been the norm for Aon historically and is our expectation over the long term. We will maintain our $222 fair value estimate and narrow moat rating.

In recent years, Aon has demonstrated modest growth and improving margins, and we expect much of the same going forward, although the pandemic has created some ups and down recently. In our view, Aon is a fundamentally attractive business, with a variety of operations that share the commonality of sticky customer relationships, limited capital requirements, and flexible cost structures.