Overview of Price Target Adjustment#
BofA Securities has lowered its price target for Aon Corp (NYSE:AON) from $310 to $298. The firm has also maintained an Underperform rating on the stock, indicating that they expect it to perform worse than the market average.
Earnings Estimates Revised Upward#
Despite the price target cut, BofA has increased its earnings per share (EPS) estimates for Aon. They raised their projections by 2.4% for 2026, and by 2.1% for both 2027 and 2028. This adjustment follows Aon’s recent strong organic growth and slightly higher estimates due to a lower number of shares outstanding.
Valuation Insights#
The new price target is calculated using 90% of the lower equal-weight S&P 500 multiple of 14.6 times, applied to Aon’s revised EPS forecast for 2028. Previously, the target was based on a higher multiple of 15.6 times. BofA's decision reflects concerns about the stock's potential for price appreciation, which supports their Underperform rating.
Recent Financial Performance#
In related news, Aon PLC recently reported strong financial results for the first quarter of 2026. The company achieved earnings per share of $6.48, surpassing analysts’ expectations of $6.37. Additionally, Aon’s revenue reached $5.03 billion, exceeding the forecast of $4.97 billion. This robust performance highlights Aon’s effective strategic execution. Meanwhile, Evercore ISI has maintained its Outperform rating on Aon, setting a price target of $436, emphasizing the company’s strong performance, particularly in its Commercial Risk business, which saw a 7% organic growth. This segment is recognized for having the highest valuation multiple within Aon’s business mix.