Here's Why Investors Should Hold Onto Aon plc Stock for Now

Aon plc AON is a multinational corporation that provides risk, retirement and health solutions worldwide. The company operates into two segments: Risk Capital and Human Capital. AON has risen 3.1% in the year-to-date (YTD) period, underperforming the industry average of 7.7%.

Headquartered in Dublin, Ireland, AON holds a market capitalization of $80 billion. It offers risk management services, insurance and reinsurance brokerage, human resource consulting and outsourcing services worldwide. The company operates in more than 120 countries. Its forward P/E of 20.9X is lower than the industry average of 22.9X.

Courtesy of solid prospects, Aon currently carries a Zacks Rank #3 (Hold).

Where Do Estimates for AON Stand?

The Zacks Consensus Estimate for Aon plc’s 2025 earnings is pegged at $16.74 per share, indicating a 7.3% year-over-year rise, which remained stable over the past seven days. Furthermore, the consensus mark for revenues is pegged at $17.2 billion for 2025, implying a 9.3% year-over-year rise. It beat earnings estimates in two of the past four quarters and missed twice.

Aon plc Price and EPS Surprise

Aon plc price-eps-surprise | Aon plc Quote

AON’s Growth Drivers

Aon continues to drive growth through strategic acquisitions and partnerships. In the first quarter of 2025, the company completed seven acquisitions. Aon’s 3x3 plan supports its long-term growth.

AON’s total revenues increased 16% year over year to $4.7 billion in the first quarter of 2025. The company reported organic revenue growth of 5%. The Risk Capital segment’s revenues increased 7% year over year, while its Human Capital segment reported 40% year-over-year revenue growth. It projects revenues to witness mid-single-digit growth or higher organic growth for 2025.

In the first quarter of 2025, the company bought back common shares worth $250 million. It increased the quarterly cash dividend by 10%, marking 15 straight years of dividend hikes. This highlights its shareholder value-boosting efforts.

AON: Risks to Watch

However, there are some factors that investors should keep a careful eye on.

The company’s operating expenses have escalated over the last several years due to the inclusion of NFP’s ongoing operating expenses, and higher compensation and benefits expenses. Total expenses increased 8.9% in 2023, 23.7% in 2024 and 25% in the first quarter of 2025. The persistent escalation of expenses might weigh on its margin growth. In the first quarter of 2025, the company’s adjusted operating margin of 38.4% deteriorated 130 basis points year over year.

AON carries a significant long-term debt, which amounted to $16.3 billion at the end of the first quarter. This leads to a long-term debt-to-capitalization of 69.5%, higher than the industry average of 50%.

Key Picks

Some better-ranked stocks in the broader finance space are Horace Mann Educators Corp HMN, Heritage Insurance Holdings Inc. HRTG and EverQuote Inc EVER, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Horace Mann Educators’ current-year earnings of $4.01 per share has witnessed two upward revisions in the past 30 days against none in the opposite direction. Horace Mann Educators beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 24.1%. The consensus estimate for current-year revenues is pegged at $1.7 billion, implying 6.6% year-over-year growth.

The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $3.25 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in each of the trailing four quarters, with the average surprise being 363.2%. The consensus estimate for current-year revenues is pegged at $854.9 million, calling for 4.6% year-over-year growth.

The Zacks Consensus Estimate for EverQuote’s current-year earnings is pegged at $1.17 per share, implying 33% year-over-year growth. EverQuote beat earnings estimates in each of the trailing four quarters, with the average surprise being 122.6%. The consensus mark for the current-year revenues is pegged at $644.1 million, calling for 28.8% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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