Aon announced a new share repurchase program worth $5 billion. The insurance provider said it had approximately $1.1 billion remaining under its current share repurchase authorization at the end of Sept. 30.
Aon (AON) said that it “intends to complete the existing program before repurchasing shares under the newly authorized program.”
Aon’s CEO Greg Case said that the new share repurchase program “demonstrates our conviction in our colleagues’ ability to drive long-term growth of the firm, which we believe will be further accelerated by our pending combination with Willis Towers Watson and result in significant shareholder value creation.” (See AON stock analysis on TipRanks).
On Nov. 2, Piper Sandler analyst Paul Newsome downgraded the stock’s rating to Hold from Buy and slashed the price target to $187 (5.9% downside potential) from $228. Newsome told investors in a research note that Aon has a higher proportion of its business in economically sensitive consulting businesses which involves heavy project work components to revenue. He further believes that the rebound in organic growth seems to favour Arthur J. Gallagher more than its large public peers.
Currently, the rest of the Street is sidelined on the stock with a Hold analyst consensus. The average price target stands at $215.50 implying upside potential of about 8.5% to current levels. Shares are down by about 4.6% year-to-date.
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