Aon Plc Stock Fair Value Calculation – Aon PLC Stock Drops After $13.4B Acquisition of NFP

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Aon ($NYSE:AON) PLC, a global professional services firm, recently announced an agreement to acquire NFP Corporation for a combination of $13.4 billion in stock and cash. Following the announcement, Aon PLC‘s stock dropped significantly. Aon PLC is a leading global professional services firm that provides a broad range of risk, retirement, and health solutions. It offers clients a wide range of services, from risk management and insurance brokerage to consulting and retirement solutions. The acquisition of NFP Corporation is designed to increase Aon PLC’s presence in the benefits and retirement space. It is expected to expand the company’s capabilities in the defined-contribution and health and welfare markets, as well as provide an opportunity for Aon PLC to expand its life and annuities capabilities.

Despite the potential growth opportunities for the firm, investors were less than thrilled with the news. The stock dropped more than five percent following the announcement. This raised concerns for investors regarding the company’s ability to successfully integrate NFP into its existing operations. Only time will tell whether the purchase of NFP will be a success or a costly mistake. Regardless, investors will be watching closely as the deal progresses.

Share Price

On Wednesday, Aon PLC‘s stock opened at $291.0 and closed at $294.1, a 6.0% drop from its prior closing price of $313.0. This decrease came following the announcement of the company’s acquisition of NFP Corp for $13.4 billion. The acquisition is expected to be a “transformative moment” for both companies and their respective industry segments.

Aon will be able to gain a larger presence in the insurance brokerage market, while NFP will gain access to a much larger customer base. Although there is some uncertainty about the success of the acquisition, analysts remain optimistic about the prospects of both companies. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Aon Plc. More…

Cash Flow Snapshot

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Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Aon Plc. More…

Key Ratios Snapshot

Some of the financial key ratios for Aon Plc are shown below. More…

Analysis – Aon Plc Stock Fair Value Calculation

At GoodWhale, we always advise our clients to look at the fundamentals of a stock before making any investment decisions. Aon PLC is no exception. Our proprietary Valuation Line gives Aon PLC’s intrinsic value as $324.0. This means that the stock is currently undervalued by 9.2%, as it is currently being traded at $294.1. This makes it a good potential investment for those looking for a bargain. Our analysts agree that Aon PLC could be a good investment option for those looking for long-term growth. However, it is still important to do your own research and make sure that the stock is right for you before making any decisions. More…

Peers

Aon PLC is a leading global professional services firm that provides a broad range of risk, reinsurance, retirement and health solutions. Its competitors are Markel Corp, Gourmet Ocean Products Inc, Beeyu Overseas Ltd.

– Markel Corp ($NYSE:MKL)

Markel Corporation is a financial holding company that, through its subsidiaries, engages in a variety of insurance, reinsurance, and investment activities worldwide. The company has a market capitalization of $15.71 billion as of 2022 and a return on equity of 1.8%. Markel Corporation was founded in 1930 and is headquartered in Glen Allen, Virginia. The company’s primary operating subsidiaries include Markel Specialty, Markel International, Markel American, and Markel Ventures. Markel Specialty provides insurance products and services to a range of niche markets, including collector vehicles, sports and leisure, and healthcare professionals. Markel International writes insurance and reinsurance business in the United Kingdom, Europe, Canada, Asia, Latin America, and Australia. Markel American provides insurance products for a variety of personal and commercial lines of business, including homeowners, automobile, boat, and umbrella coverage. Markel Ventures invests in a variety of businesses, including insurance and reinsurance, healthcare, technology, and industrial products.

– Gourmet Ocean Products Inc ($TSXV:GOP.H)

Gourmet Ocean Products Inc is a seafood company with a market cap of 1.25M as of 2022. The company has a Return on Equity of 15.42%. The company is involved in the fishing, processing, and distribution of seafood products.

– Beeyu Overseas Ltd ($BSE:532645)

The company’s market cap is $35.35 million as of 2022. Its ROE is -46.14%. The company is engaged in the business of providing international education and training services. It offers a range of services, including academic counseling, admissions services, English-language training, and cultural exchange programs.

Summary

Aon PLC is a London-based multinational professional services firm providing risk, retirement, and health solutions. Recently, the company announced a deal to acquire insurance brokerage firm NFP in a $13.4 billion stock and cash transaction. The news caused Aon’s stock price to dip on the same day. Despite the short-term decline in stock price, analysts remain optimistic regarding Aon’s long-term prospects and continued growth.

They cite the strategic importance of this acquisition, which bolsters Aon’s presence in the insurance broker landscape, as well as its commitment to offering risk prevention and health solutions. With its global presence, strong balance sheet, and highly experienced management team, Aon is expected to continue expanding its offerings and gaining market share.