Aon (AON) AI Stock Analysis

• Market Cap: $80.65B
• Dividend Yield: 0.72%
• Average Volume (3M): 1.37M
• Price to Earnings (P/E): 29.9
• Beta (1Y): 0.39
• Revenue Growth: 17.51%
• EPS Growth: 1.31%
• Country: US
• Employees: 60,000
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Brokers
• EPS (TTM): 12.66
• Shares Outstanding: 216,001,100
• 10 Day Avg. Volume: 1,409,676
• 30 Day Avg. Volume: 1,374,165
• PEG Ratio: 22.83
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.37
• Price to Cash Flow (P/CF): 17.60
• P/FCF Ratio: 17.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $416.00
• Price Target Upside: 12.73% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

Aon's overall stock score reflects strong financial performance and positive guidance from the earnings call, indicating robust operational capabilities and strategic execution. However, the high leverage on the balance sheet and relatively high valuation metrics temper the score. Technical indicators suggest bullish momentum but highlight potential risks of overbought conditions. The valuation concerns and market volatility challenges are notable factors impacting the score.

Positive Factors

Growth Strategy

The roll-off of Aon United+NFP Integration costs represents a nearly $500mm tailwind.

Leadership

Aon made a notable hire by naming ex-Lloyd's CEO John Neal as Global CEO of Reinsurance.

Market Position

Aon currently trades as the third most inexpensive insurance broker on a consensus free cash flow basis.

Negative Factors

Financial Performance

Aon's working capital impact on operating cash flows deteriorated significantly and was negative for the first time since 2019.

Leadership Departure

The departure of Eric Andersen is viewed by some investors as the loss of talent that had helped propel Aon's stock price over the past decade.

Revenue Challenges

Aon's EPS estimates move lower on reduced revenue due to foreign exchange issues and higher pension expenses.

Aon Business Overview & Revenue Model

Company Description

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide. It offers commercial risk solutions, including retail brokerage, cyber, and global risk consulting solutions, as well as acts as a captives management; and health solutions, such as health and benefits brokerages, and health care exchanges. The company also provides treaty and facultative reinsurance, as well as insurance-linked securities, capital raising, strategic advice, restructuring, and mergers and acquisitions services; and corporate finance advisory services and capital markets solutions products. In addition, it offers strategic design consulting services on their retirement programs, actuarial services, and risk management services; advice services on developing and maintaining investment programs across a range of plan types, including defined benefit plans, defined contribution plans, endowments, and foundations for public and private companies, and other institutions; and advice and solutions that help clients in risk, health, and wealth through commercial risk, reinsurance, health, and wealth solutions. Further, the company offers CoverWallet; Affinity; Aon Inpoint; CoverWallet; and ReView services. Aon plc was founded in 1919 and is headquartered in Dublin, Ireland.

How the Company Makes Money

Aon makes money primarily through fees and commissions earned from its risk and insurance brokerage services, where it acts as an intermediary between clients and insurance carriers. The company also generates revenue from its consulting services in risk management, retirement, and health solutions, providing tailored advice and solutions to clients. Additionally, Aon derives income from its data and analytics services, which offer insights and tools to help clients make informed decisions about risk and benefit management. Partnerships with insurance companies and other financial institutions also play a significant role in Aon's revenue generation, as these relationships enable the company to offer a wide range of products and services to its clients.

Aon Financial Statement Overview

Summary

Aon's financial performance is marked by strong revenue and profit growth, supported by efficient cash generation. The company exhibits robust profitability margins but faces challenges with high leverage, impacting its balance sheet stability. Overall, Aon demonstrates a solid financial standing with some leverage-related risks that are mitigated by strong operational efficiency and cash flow management.

Income Statement

Aon has demonstrated strong revenue growth over the years, with a significant increase from $11.01 billion in 2019 to $15.70 billion in 2024. The company maintains healthy gross and net profit margins, with a gross profit margin of 47.2% and a net profit margin of 16.9% in 2024. The EBIT and EBITDA margins are robust at 24.4% and 24.4% respectively, reflecting efficient operations. The company shows a consistent upward trend in profitability, signaling a strong competitive position in the insurance industry.

Balance Sheet

Aon's balance sheet shows a high debt-to-equity ratio due to substantial total debt of $17.70 billion against a stockholders' equity of $6.12 billion in 2024. However, the company's ROE is strong at 43.4%, indicating efficient use of equity to generate profits. The equity ratio stands at 12.5%, suggesting a moderate level of financial leverage. The company's balance sheet stability is somewhat impacted by high leverage, but the strong ROE offsets some of this risk.

Cash Flow

Aon has a healthy operating cash flow of $3.04 billion and a strong free cash flow of $2.82 billion in 2024. The operating cash flow to net income ratio is 1.14, and the free cash flow to net income ratio is 1.06, indicating efficient cash generation relative to net income. Although free cash flow growth has fluctuated, the company maintains a solid cash flow position, supporting its financial flexibility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.70B	13.38B	12.48B	12.19B	11.07B
	Gross Profit
7.42B	6.47B	6.00B	5.46B	5.16B
	EBIT
3.83B	3.79B	3.67B	2.09B	2.78B
	EBITDA
4.94B	3.91B	3.83B	2.58B	3.21B
	Net Income Common Stockholders
2.65B	2.56B	2.59B	1.25B	1.97B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.30B	1.15B	1.14B	836.00M	1.19B
	Total Assets
48.97B	33.96B	32.70B	31.93B	32.11B
	Total Debt
17.70B	12.03B	11.46B	10.16B	8.63B
	Net Debt
16.62B	11.25B	10.77B	9.62B	7.74B
	Total Liabilities
42.53B	34.70B	33.13B	30.77B	28.52B
	Stockholders Equity
6.12B	-826.00M	-529.00M	1.06B	3.50B
Cash Flow		Free Cash Flow
2.82B	3.18B	3.02B	2.04B	2.64B
	Operating Cash Flow
3.04B	3.44B	3.22B	2.18B	2.78B
	Investing Cash Flow
-2.83B	-188.00M	-449.00M	49.00M	-679.00M
	Financing Cash Flow
796.00M	-2.87B	-1.79B	-1.92B	-2.09B

Aon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 369.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AON, the sentiment is Negative. The current price of 369.02 is below the 20-day moving average (MA) of 388.24, below the 50-day MA of 390.62, and above the 200-day MA of 357.54, indicating a neutral trend. The MACD of 1.66 indicates Positive momentum. The RSI at 55.74 is Neutral, neither overbought nor oversold. The STOCH value of 65.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AON.

Aon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AJG	79 Outperform	$82.81B	49.81	9.46%	0.76%	15.21%	46.99%
ERIE	76 Outperform	$18.72B	35.28	32.89%	1.29%	16.38%	34.58%
BRO	76 Outperform	$33.43B	33.77	16.35%	0.48%	12.89%	13.50%
MMC	76 Outperform	$113.15B	28.04	31.80%	1.43%	7.60%	8.66%
AON	73 Outperform	$80.65B	29.89	100.25%	0.72%	17.51%	1.31%
WTW	72 Outperform	$31.29B	―	-1.12%	1.18%	4.74%	-108.62%
Sector *	64 Neutral	$13.46B	9.44	9.34%	4.72%	16.14%	-8.80%

Aon Corporate Events

Aon Announces Leadership Transition with New President

On March 14, 2025, Eric Andersen transitioned from his role as President of Aon plc to become a Senior Advisor, while CEO Gregory C. Case took on the additional title of President. Andersen, who joined Aon in 1997, played a pivotal role in advancing the firm’s Aon United strategy, integrating its Risk Capital and Human Capital capabilities, and operationalizing the 3×3 Plan to better serve clients. His leadership has been instrumental in strengthening Aon’s offerings and analytics, contributing significantly to the firm’s ability to deliver value to clients. Andersen expressed gratitude for his nearly three-decade tenure at Aon and looks forward to the firm’s continued growth and success.

Aon Announces Leadership Transition with Key Role Changes

On March 13, 2025, Aon plc announced a leadership transition with Michael Neller moving from his role as Chief Accounting Officer and Global Controller to become the Deputy Global Chief People Officer, focusing on Total Rewards and Talent Development. The company is initiating a search for a new Chief Accounting Officer and Global Controller, with Neller continuing in his current role until a successor is appointed, indicating a strategic shift in leadership roles that may impact the company’s operational focus and talent management strategies.