Analyst Note| Brett Horn, CFA |
Narrow-moat Aon continued to post relatively strong growth in the first quarter. Revenue increased 8% year over year on an organic basis as the company continues to benefit from some industry tailwinds. Still, growth in the quarter modestly lagged what we saw from peer Marsh McLennan. Aon and its peers have achieved only modest organic growth historically. This is our expectation over the long term, and management’s guidance suggests growth may start to moderate going forward. We will maintain our $250 fair value estimate. While we think there is a lot to like about Aon’s business, we believe the shares are currently a bit overvalued, as the market price appears to be overly focused on recent results.