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DCF Valuation
Base-case fair value
$101.73
Intrinsic $135.64 · 25% MOS
Current price: $216.09
Base-case summary
Our base-case DCF for Arthur J. Gallagher & Co. (AJG) projects 10 years of free cash flow growth at 8.1% for years 1–5 and 4.1% for years 6–10, anchored to 8.1% historical FCF growth, then applies a 2.5% perpetual growth rate and a 8.0% discount rate. Starting from $1.9B in trailing free cash flow, this produces an intrinsic value of $135.64 per share. A 25% safety margin gives a fair value of $101.73, suggesting the stock is currently 53% overvalued against the $216.09 market price.
See 3 scenarios side by side
Conservative, Base, and Optimistic fair values, plus the sensitivity matrix and FCF history. Free account.
Model inputs
TTM Free Cash Flow
$1.9B
Cash & equivalents
$1.4B
Total debt
$13.2B
Shares outstanding
257M