Is Arthur J. Gallagher & Co. overvalued or undervalued?

As of 6 June 2025, the valuation grade for Arthur J. Gallagher & Co. has moved from very expensive to expensive, indicating a shift in perception regarding its market value. The company is currently considered overvalued. Key ratios include a P/E ratio of 52, an EV to EBITDA of 20.04, and a Price to Book Value of 3.77, all of which suggest that the stock is priced at a premium compared to its earnings and book value.
In comparison to its peers, Marsh & McLennan Cos., Inc. has a P/E of 27.15 and an EV to EBITDA of 16.39, while Aon Plc shows a P/E of 27.77 and an EV to EBITDA of 14.74. These figures highlight that Arthur J. Gallagher & Co. is trading at significantly higher multiples than its competitors, reinforcing the conclusion of overvaluation. Additionally, the company's recent stock performance has outpaced the S&P 500 over the last year, with a return of 22.49% compared to the S&P 500's 10.26%, which may have contributed to its elevated valuation.