AON changes
Pick any two versions below to diff them.
- Price
- $292.57 → $336.55(+15.0%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Oct 28, 2026 → Jan 28, 2027
- Next earnings is estimate
- No → Yes
- About
- Aon is a global professional services firm based in Dublin, Ireland. It works with clients in more than 120 countries. Its Risk Capital business brokers commercial insurance and reinsurance and advises clients on risk, and its Human Capital business advises on health benefits, retirement and talent. Aon earns most of its revenue from commissions and fees, so it does not take insurance risk itself. Total revenue was $17.2 billion in 2025, with organic growth of 6%. In 2024, Aon bought NFP, a broker for middle-market companies in the United States, and it later sold the NFP Wealth business. In removed: Q2 added: Q3 2026, Risk Capital revenue was removed: $3.0 added: $2.7 billion and Human Capital revenue was removed: $1.2 added: $1.4 billion.
- Thesis
- The market prices Aon for the cost and risk of its $17.0 billion purchase of USI, the tenth largest US insurance broker. Aon agreed to the deal on August 30, 2026, and it funds it fully with new debt. In September 2026, it sold $13.5 billion of new senior notes and signed $4.0 billion of delayed draw term loans. Aon said that it does not expect to buy back shares in the near term, because it puts debt repayment first. It expects the deal to add to adjusted EPS only from 2028. The CFO also left his role on August 17, 2026, and an interim CFO now leads finance during the deal. For the gap to close, three things must be true. The USI purchase must close in Q4 2026, as Aon expects, with no large new conditions. Aon must show progress toward the $395 million of yearly synergies and pay down debt, so that it keeps its Baa2 and A- ratings. Organic revenue growth must stay at mid-single digits or removed: better, as the 2026 guidance says. The added: better. Organic growth was 6% in Q3 removed: 2026 report on October 28, 2026, added: and Aon plans to reduce leverage to its target of 2.8 to 3.0 times in about 24 months. The close of the USI purchase in Q4 2026 is the next test. The Q4 report and the 2027 outlook in early 2027 are the main test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a slower integration of USI, which would delay debt repayment and buybacks.
- Risks
- The USI purchase of $17.0 billion is funded with new debt. Debt was removed: $14.97 added: $28.04 billion at removed: June added: September 30, 2026, removed: before added: after Aon sold $13.5 billion of new notes in September 2026. If integration is slow or synergies are lower, debt stays high and buybacks stay on hold longer. Broker revenue depends on insurance prices and client activity. Lower commercial insurance prices or weaker economies can slow organic growth below the mid-single-digit target. Human Capital revenue fell 4% in removed: Q2 2026. added: Q3 2026, mainly because Aon sold the NFP Wealth business. The CFO left his role in August 2026, just before Aon agreed to buy USI, and the finance team is under an interim leader. Changes in leaders can slow decisions during the integration. The deal needs regulatory approvals. A delay past Q4 2026 or new conditions can raise costs and delay synergies.
- Balance sheet
- Cash: removed: $1.3B added: $15.3B Debt: removed: $15.0B added: $28.0B Net debt: removed: $13.7B added: $12.7B Interest cover: removed: 7.3× added: 6.1× Debt due within 12 months: removed: $2.0B added: $1.7B Last debt due: 2056 Ratings: Moody's Baa2, S&P A- Aon funds its operations with senior notes, commercial removed: paper added: paper, term loans and bank lines. At removed: June added: September 30, 2026, debt was removed: $14.97 added: $28.04 billion: removed: $2.02 added: $1.72 billion of short-term debt and current long-term debt, and removed: $12.95 added: $26.32 billion of long-term debt. added: Debt rose from $15.25 billion at December 31, 2025, because Aon sold $13.5 billion of new notes in September 2026 for the USI purchase. Cash and short-term investments were removed: $1.27 billion. added: $15.32 billion at September 30, 2026, mostly the note proceeds that Aon holds until the USI purchase closes. Fiduciary assets and removed: liabilities, added: liabilities of $18.89 billion, which Aon holds for clients and insurers, are left out. Interest cover is operating income divided by interest expense for the first removed: half added: nine months of 2026. removed: After June 30, debt rises sharply for the USI purchase: in September 2026, Aon removed: sold $13.5 billion of new notes due from 2029 to 2056 and signed added: also has $4.0 billion of delayed draw term removed: loans. It also signed added: loans and a removed: new $3.0 billion revolving credit removed: facility. added: facility, signed in September 2026. Aon expects to keep its Baa2 rating from Moody's and A- rating from removed: S&P, and it added: S&P. It will put debt repayment ahead of removed: buybacks. added: buybacks, and it targets leverage of 2.8 to 3.0 times in about 24 months. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 28, 2026: Q3 2026 earnings: organic growth. removed: Pending. added: Passed. Watch: Organic revenue growth of 5% or more and the 2026 guidance kept pass; organic growth below 4% or a cut to the guidance fails. added: Outcome: Organic revenue growth was 6% and adjusted EPS rose 10% to $3.36, and Aon said it expects strong results for the full year 2026. Q4 2026 (estimate): USI purchase closes. Pending. Watch: The USI purchase closes in Q4 2026 with no large new conditions and with the Baa2 and A- ratings kept passes; a delay into 2027 or a rating cut fails. added: Jan 28, 2027 (estimate): Q4 2026 earnings: organic growth and debt repayment. Pending. Watch: Organic revenue growth of 5% or more, a 2027 outlook that keeps mid-single-digit growth and a clear start to debt repayment pass; organic growth below 4% or slower debt repayment fails.
- Recent events
- added: Oct 28, 2026: Aon reported Q3 2026 results. Total revenue rose 3% to $4,101 million, with organic growth of 6%. Adjusted EPS rose 10% to $3.36, and diluted EPS rose 6% to $2.23. Aon bought back no shares in the quarter. It expects the USI purchase to close in Q4 2026, and it will repay debt to reach its leverage target of 2.8 to 3.0 times in about 24 months. Sep 18, 2026: Aon signed a $4.0 billion unsecured delayed draw term loan facility with two-year and three-year tranches and a new $3.0 billion revolving credit facility. The new revolver replaced two $1.0 billion revolving credit facilities. Sep 14, 2026: Aon agreed to sell $13.5 billion of senior notes due from 2029 to 2056, with interest rates from 5.350% to 6.450%. Most of the notes fund the USI purchase. Aug 31, 2026: Aon agreed to buy USI from KKR and other owners for $17.0 billion, or $16.7 billion net of tax attributes. USI has about $3 billion of yearly revenue. Aon expects $395 million of yearly synergies, a close in Q4 2026 and higher adjusted EPS from 2028. USI's CEO, Mike Sicard, will become President of Aon after the close. Aug 17, 2026: Edmund Reese left his role as CFO and became a senior advisor until August 16, 2027. Nadin Virani, Global Head of Corporate Planning and Analytics, became interim CFO. Jul 29, 2026: Aon reported Q2 2026 results. Total revenue rose 2% to $4,246 million, with organic growth of 5%. Adjusted EPS rose 9% to $3.81. Aon bought back $600 million of shares in the quarter and kept its 2026 guidance of mid-single-digit or greater organic growth.