Goldman Sachs downgraded Arthur J. Gallagher (AJG) to Neutral from Buy with an unchanged price target of $313, reflecting an 4% total return opportunity. The firm continues to believe that Arthur J. Gallagher’s “high quality” middle market business can generate among the strongest net-new business growth within the insurance brokerage universe, but says its organic growth and margin estimates are no longer in excess of consensus. It sees below-Street adjusted EBITDAC margins driven by short term interest rate pressure on fiduciary investment income and slower growth in the company’s premium financing business.
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