Aon plc (AON) Buy or Sell Stock Guide

Last updated: Jun 03, '18

The analysis below may be helpful to you if you have any of the following questions about AON stock:

  • Is AON a buy or a sell?
  • Should I sell or hold AON stock today?
  • Is AON a good buy / a good investment?
  • What are AON analyst opinions, recommendations, ratings?

Here are AON stock buy reasons/signals:

1. The tollbooth nature of its brokerage operations makes Aon a relatively stable producer of free cash flow.

2. Aon’s established corporate relationships provide an opportunity to enter and cross-sell new services and move into a larger risk management role.

3. Management estimates that the top four global brokers have only about 30% market share, leaving plenty of space to expand without intense head-to-head competition.

4. AON quarterly revenue growth was 29.80%, higher than the industry and sector average revenue growth (4.76% and 6.53%, respectively).

5. AON profitability is improving. The YoY profit margin change was 12.26pp.

6. AON average analyst rating is Buy.

Here are AON stock sell reasons/signals:

1. Aon is exposed to the insurance pricing cycle. Reinsurance prices have been falling, and primary pricing increases have been weakening recently.

2. Aon’s established position on its core businesses limits its growth prospects, and expansion into new areas could potentially dilute its moat.

3. Aon has aggressively repurchased stock in recent years, implying that management sees little opportunity for value-creative reinvestment.

4. AON Price/Book ratio is 7.57, and it’s high compared to its industry peers’ P/B ratios.

5. AON Price/Sales ratio is 3.20, and it’s high compared to its industry peers’ P/S ratios.

What are your thoughts on AON?

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