We publish no single base value for Arthur J. Gallagher & Co. Our valuation methods put it between $434.89 and $653.52 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
| Method | Value | vs price | Basis |
|---|---|---|---|
| Discounted cash flow | $653.52 | +135.7% | free cash flow $2.89bn, growth 20.9% for 5 years, then fading to 3% over 5 more, discounted at 8.14%; stress floor — |
| Exit multiple (P/E) | $434.89 | +56.8% | earnings per share $13.09 valued at 25.7× (the stock's own median P/E) in 5 years, discounted back |
| Sum of the parts | — | — | no sum of the parts: this run holds no segment disclosure for the name |
| Price to sales | — | — | not reached: the cash-flow or earnings methods produced an anchor, so this fallback was not run |
| Tangible book | — | — | used only for lenders, where book value is the business |
| Price to FFO (REITs) | — | — | used only for REITs |
Each working is rebuilt by code from the valuation's own figures and checked against the published value.
The discount rate:
| Risk-free rate | 5.13% (10-year US Treasury yield) |
| Company's own beta | 0.47 (5 years of monthly returns against the S&P 500; standard error 0.21) |
| Peer beta | 0.52 (median of 5 S&P 500 Insurance Brokers companies) |
| Blend of own and peers | 0.51 (18% own, 82% peers, weighted by how precisely the company's own beta is measured) |
| Adjusted beta | 0.67 (0.67 × 0.51 + 0.33, pulled toward the market's 1.0) |
| Equity risk premium | 4.5% |
| Discount rate = risk-free + adjusted beta × premium | 8.14% |
Free cash flow grows 20.90% a year for 5 years, then fades in equal steps toward 3% over 5 more; each year is discounted by 1 ÷ (1 + rate)^year:
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Now | — | $2.89bn | — | — |
| Year 1 | 20.90% | $3.49bn | 0.9247 | $3.23bn |
| Year 2 | 20.90% | $4.22bn | 0.8550 | $3.61bn |
| Year 3 | 20.90% | $5.10bn | 0.7906 | $4.04bn |
| Year 4 | 20.90% | $6.17bn | 0.7311 | $4.51bn |
| Year 5 | 20.90% | $7.46bn | 0.6760 | $5.04bn |
| Year 6 | 17.92% | $8.80bn | 0.6251 | $5.50bn |
| Year 7 | 14.93% | $10.11bn | 0.5780 | $5.84bn |
| Year 8 | 11.95% | $11.32bn | 0.5345 | $6.05bn |
| Year 9 | 8.97% | $12.33bn | 0.4942 | $6.10bn |
| Year 10 | 5.98% | $13.07bn | 0.4570 | $5.97bn |
| Terminal value = year-10 cash flow × (1 + 3%) ÷ (8.14% − 3%) | $261.71bn |
| Terminal value in today's money | $119.61bn |
| Present value of years 1–10 | $49.90bn |
| Total present value | $169.50bn |
| Shares outstanding | 259.37m |
| Value per share = total ÷ shares | $653.52 |
How the DCF value moves with the discount rate and the starting growth (the middle cell is the published value):
| Discount rate | Growth 15.9% | Growth 20.9% | Growth 25.9% |
|---|---|---|---|
| 7.14% | $617.23 | $831.71 | $1,112.40 |
| 8.14% | $487.69 | $653.52 | $869.95 |
| 9.14% | $400.77 | $534.13 | $707.72 |
The same DCF at each beta, starting growth unchanged:
| Beta | Value | Discount rate | DCF value |
|---|---|---|---|
| Company's own beta | 0.47 | 7.24% | $810.06 |
| Peer beta | 0.52 | 7.47% | $764.92 |
| Adjusted beta (used) | 0.67 | 8.14% | $653.52 |
Earnings per share grow on the same fading path as the DCF:
| Year | Growth | Earnings per share |
|---|---|---|
| Now | — | $13.09 |
| Year 1 | 20.90% | $15.83 |
| Year 2 | 16.42% | $18.43 |
| Year 3 | 13.07% | $20.84 |
| Year 4 | 10.55% | $23.04 |
| Year 5 | 8.66% | $25.03 |
| Earnings per share in year 5 | $25.03 |
| Exit P/E (the stock's own median P/E) | 25.7× |
| Value in 5 years = earnings × P/E | $643.29 |
| Discounted at 8.14% over 5 years: ÷ 1.4792 | $434.89 |
We publish no single base value for Arthur J. Gallagher & Co. Our valuation methods put it between $434.89 and $653.52 a share. The valuation code's reason: no point fair value: the two anchors behind it compound the same growth rate and differ only in how they end — a perpetuity at the terminal rate against a multiple on the final year — so the midpoint between them measures terminal treatment rather than what the business is worth. The published range is the same reading with the false precision removed: read it as the span the method supports, and treat neither edge as a point estimate.
One-year price simulation: a 10% chance the price is below $183.99 and a 10% chance it is above $436.92 in a year; a 53% chance it is higher than today's $277.28, from 33.57% volatility. The simulation assumes the price drifts up at our discount rate of 8.14% a year.
At $277.28 the price implies free cash flow growing 6.5% a year for five years and then fading toward 3% over five more; its revenue has grown 20.9%.
| Week | Price | Base value |
|---|---|---|
| 2 Oct 2026 | $226.11 | — |
| 9 Oct 2026 | $232.70 | $252.00 |
| 16 Oct 2026 | $254.88 | — |
| 23 Oct 2026 | $268.04 | — |
| 30 Oct 2026 | $276.07 | — |
| 6 Nov 2026 | $281.61 | — |
| 12 Nov 2026 | $277.28 | — |
Data as of 12 Nov 2026; financials to 30 Sep 2026. Sources: company filings via EODHD, SEC EDGAR, US Treasury. How these values are computed. Not investment advice.
Run a full Desk Run on AJG · Arthur J. Gallagher & Co. company page · Call and put prices