AON (NYSE:AON) Shares Gap Down – What’s Next?

Aon plc (NYSE:AON) shares gapped down prior to trading on Monday . The stock had previously closed at $355.40, but opened at $340.00. AON shares last traded at $332.1210, with a volume of 133,063 shares trading hands.

AON News Roundup

Here are the key news stories impacting AON this week:

• Positive Sentiment: The acquisition would create a leading U.S. middle-market insurance brokerage platform, building on Aon’s 2024 purchase of NFP and expanding its reach among small and midsize businesses. It also increases exposure to the fast-growing excess and surplus (E&S) insurance market. Aon to acquire USI to establish the premier U.S. middle-market platform
• Positive Sentiment: Aon expects revenue and cost synergies to generate approximately $395 million in annual run-rate adjusted EBITDA, with the deal expected to become accretive to adjusted earnings per share in 2028. USI CEO Mike Sicard will become Aon’s president and global CEO of the middle-market business, supporting integration and continuity. Aon CEO discusses USI acquisition
• Neutral Sentiment: The transaction is expected to close in the fourth quarter, but remains subject to regulatory approvals. Aon plans to finance the purchase with new debt, making the deal’s timing and financing structure important factors for investors. Aon to buy USI in $17 billion deal
• Negative Sentiment: The large all-debt-funded purchase raises concerns about leverage, integration costs and the price paid for USI. Because earnings accretion is not expected until 2028, investors may be discounting the near-term pressure from financing costs and execution risk. Aon close to acquiring USI from KKR

Analyst Upgrades and Downgrades

AON has been the topic of several research reports. Citigroup raised their price objective on AON from $420.00 to $435.00 and gave the stock a “buy” rating in a report on Thursday, July 30th. Roth Capital reissued a “buy” rating and issued a $420.00 target price on shares of AON in a research report on Friday, July 31st. Piper Sandler lifted their price target on AON from $377.00 to $391.00 and gave the stock a “neutral” rating in a research report on Thursday, July 30th. Weiss Ratings upgraded AON from a “hold (c)” rating to a “hold (c+)” rating in a research note on Wednesday, August 19th. Finally, Barclays raised their target price on shares of AON from $372.00 to $382.00 and gave the stock an “equal weight” rating in a research report on Tuesday, July 7th. Twelve analysts have rated the stock with a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat.com, AON currently has an average rating of “Moderate Buy” and an average target price of $412.62.

AON Price Performance

The company has a 50-day moving average of $353.13 and a 200-day moving average of $333.94. The company has a debt-to-equity ratio of 1.34, a quick ratio of 1.54 and a current ratio of 1.54. The stock has a market cap of $70.15 billion, a price-to-earnings ratio of 18.23, a PEG ratio of 1.83 and a beta of 0.69.

AON (NYSE:AON) last announced its earnings results on Wednesday, July 29th. The financial services provider reported $3.81 earnings per share for the quarter, beating the consensus estimate of $3.80 by $0.01. AON had a return on equity of 42.13% and a net margin of 22.27%.The company had revenue of $4.25 billion for the quarter, compared to the consensus estimate of $4.28 billion. During the same period last year, the business posted $3.49 EPS. The company’s revenue was up 2.2% on a year-over-year basis. As a group, equities research analysts predict that Aon plc will post 19.06 earnings per share for the current year.

AON Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, August 14th. Shareholders of record on Monday, August 3rd were given a dividend of $0.82 per share. The ex-dividend date was Monday, August 3rd. This represents a $3.28 dividend on an annualized basis and a yield of 1.0%. AON’s dividend payout ratio is presently 18.08%.

Insider Buying and Selling at AON

In other news, General Counsel Darren Zeidel sold 1,900 shares of the business’s stock in a transaction dated Tuesday, July 28th. The shares were sold at an average price of $377.76, for a total transaction of $717,744.00. Following the transaction, the general counsel directly owned 11,504 shares in the company, valued at $4,345,751.04. The trade was a 14.17% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. Insiders have sold a total of 4,450 shares of company stock valued at $1,659,242 over the last quarter. 1.00% of the stock is owned by insiders.

Institutional Investors Weigh In On AON

A number of institutional investors have recently added to or reduced their stakes in AON. California State Teachers Retirement System grew its holdings in AON by 32,835.5% during the second quarter. California State Teachers Retirement System now owns 101,761,829 shares of the financial services provider’s stock worth $33,753,381,000 after acquiring an additional 101,452,856 shares during the period. Capital World Investors lifted its holdings in AON by 1.5% in the fourth quarter. Capital World Investors now owns 12,252,904 shares of the financial services provider’s stock valued at $4,323,850,000 after acquiring an additional 176,207 shares during the period. State Street Corp boosted its position in shares of AON by 1.2% during the 3rd quarter. State Street Corp now owns 9,229,464 shares of the financial services provider’s stock worth $3,291,048,000 after purchasing an additional 105,154 shares in the last quarter. Dodge & Cox grew its stake in shares of AON by 126.6% during the 4th quarter. Dodge & Cox now owns 7,852,456 shares of the financial services provider’s stock worth $2,770,975,000 after purchasing an additional 4,387,773 shares during the period. Finally, Geode Capital Management LLC increased its holdings in shares of AON by 0.5% in the 4th quarter. Geode Capital Management LLC now owns 5,141,363 shares of the financial services provider’s stock valued at $1,810,726,000 after purchasing an additional 28,066 shares in the last quarter. Hedge funds and other institutional investors own 86.14% of the company’s stock.

AON Company Profile

Aon plc is a global professional services firm that provides a broad suite of risk, retirement and health solutions to corporations, institutions and individuals. The company operates primarily as an insurance broker and risk adviser, helping clients identify, quantify and transfer risk across property, casualty, cyber and other areas. Aon also offers reinsurance brokerage and capital market solutions that connect insurers, reinsurers and corporate buyers.

In addition to traditional brokerage activities, Aon delivers consulting and outsourcing services in areas such as human capital, benefits, and retirement plan design and administration.