Using the PEG framework with analyst consensus forward EPS growth of 25.0% plus 1.2% dividend yield, Arthur J. Gallagher & Co. has a fair value of $331.25 based on NTM EPS (FY2026) of $13.25. The current PEG ratio is 0.26.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
Growth above 25% is capped — hypergrowth may not be sustainable long-term.
| EPS Growth RateForward | 60.7% |
| Dividend Yield | +1.2% |
| Adjusted Growth (clamped 8–25%)Clamped | 25.0% |
| Fair P/E | 25.0x |
| NTM EPS (FY2026) | $13.25 |
| Fair Value | $331.25 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $5.75 | — | — |
| FY2026E | $13.25 | +130.4% | 4 |
| FY2027E | $14.85 | +12.1% | 5 |
2Y Forward EPS CAGR: 60.7%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $906.8M | $4.37 | — |
| FY2022 | $1.1B | $5.19 | +18.8% |
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.
| FY2023 | $969.5M | $4.42 | -14.8% |
| FY2024 | $1.5B | $6.53 | +47.7% |
| FY2025 | $1.5B | $5.75 | -11.9% |
4Y Historical EPS CAGR: 7.1%