AON Aon plc - Fundamental Analysis
BULLISH
AON Stock | Fundamental Analysis & Investment Insights
NYSE
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Financial Services
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Insurance Brokers
Current Price
$350.13
Analyst Target
$402.67
+15.0% Upside
52W High
$412.97
52W Low
$323.73
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
88%
Analysis Accuracy
Aon (AON) presents a compelling investment case supported by strong profitability, consistent earnings growth, and a favorable analyst outlook, despite near-term price underperformance. The stock trades at a premium valuation (P/E 28.01) relative to sector peers (avg 20.60), but this is justified by superior ROE of 37.69% and robust 34.4% YoY earnings growth. While insider selling raises a minor concern, the low dividend payout ratio of 22.72% and strong cash flow generation suggest disciplined capital allocation. Aon’s long-term price trajectory remains positive with a 5Y return of +74.7%, outpacing most peers despite a weak 1Y performance of -6.4%.
Key Strengths
Exceptional ROE of 37.69% significantly above sector average of 25.17%, indicating superior capital efficiency
Strong 34.4% YoY earnings growth, well above peer average revenue growth of 24.18%
High operating margin of 20.36% and gross margin of 46.76%, reflecting pricing power and cost discipline
Analyst target price of $402.67 implies 15% upside, with unanimous buy rating from 18 analysts
Low dividend payout ratio of 22.72% provides ample room for future increases or reinvestment
Key Risks
Premium valuation with P/E of 28.01 vs sector avg 20.60 creates vulnerability to multiple contraction
High debt/equity ratio of 2.15, more than triple the sector average of 0.72, increasing financial risk
Recent insider selling: General Counsel sold $3.03M, signaling potential lack of confidence
Q/Q EPS decline of -20.7% suggests near-term earnings volatility despite strong YoY growth
Low liquidity with quick ratio of 0.22, indicating limited short-term cash buffer
AI Fair Value Estimate
Based on comprehensive analysis
$402.67
+15.0% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare AON against industry averages and similar companies
Insider Trading & Analyst Ratings
Track insider transactions and Wall Street analyst recommendations