Aon (AON): Exploring Valuation After Strong Q3 Results and Upbeat Outlook

Aon (AON) delivered a third quarter update that caught investors’ attention, as both sales and earnings surpassed expectations. Management reinforced their outlook, pointing to momentum in core risk and reinsurance solutions.

See our latest analysis for Aon.

Aon’s latest earnings beat and ongoing strategic moves have helped the share price rebound from its recent lows, finishing at $346.32 after a 1.9% jump in the last trading day. While the 1-year total shareholder return stands at -9%, the long-term shareholder picture remains much brighter, with a 76% total return over five years. This suggests momentum could be rebuilding as management sharpens its focus on growth and capital discipline.

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This stronger than expected rebound puts Aon back in the spotlight, but after the recent rally, it is worth asking whether the current share price leaves the stock undervalued or if the market has already priced in the next stage of growth.

Most Popular Narrative: 15.1% Undervalued

With Aon's most widely followed narrative placing fair value at $407.78 versus the current price of $346.32, market expectations appear significantly below the narrative’s estimate. This sets up a debate about whether investors are missing something in Aon’s longer-term earnings power.

The consensus expects productivity gains from recent hiring to materialize over the next year. Analysts note that this may better position Aon compared to its peers and support continued margin expansion.

Read the complete narrative.

Curious what underpins this call? The narrative points to robust profit expansion, strategic business investments, and a future profit multiple that is notably higher than industry averages. If you want to find out which ambitious targets make this valuation stand out, now is your chance to dive into the full analysis.

Result: Fair Value of $407.78 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heightened macroeconomic volatility and sector headwinds could still curtail Aon's revenue growth. This could challenge the bullish narrative if conditions deteriorate further.

Find out about the key risks to this Aon narrative.

Another View: What Do Market Ratios Say?

While narratives point to Aon being undervalued, market ratios tell a different story. Aon's price-to-earnings ratio stands at 27.4 times, which is notably higher than both its peer average of 25.8 times and the US Insurance industry average of 13.1 times. The SWS fair ratio suggests a more reasonable level would be 16.6 times. This implies investors are currently paying a sizeable premium for future growth.

Story continues

Is the market getting ahead of itself, or is the premium justified if the bullish forecasts play out?

See what the numbers say about this price — find out in our valuation breakdown.NYSE:AON PE Ratio as at Nov 2025

Build Your Own Aon Narrative

If you think there’s more to the story, or would rather dig into the numbers on your own, you can take a few minutes to shape your own view: Do it your way

A great starting point for your Aon research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include AON.

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