Faster revenue growth to drive earnings
AON's organic revenue growth accelerated to 5% in Q2 and we believe that given ongoing investment and an improving economic backdrop this can be maintained at 4-5%. Meanwhile margins continue to expand (although not necessarily in a linear fashion quarter to quarter) and buybacks provide an additional 4-5pp of EPS growth pa. With well-diversified EPS growth and the stock only trading on 15x FY19 EPS - below peers and the S&P500 - we reiterate our Overweight recommendation. Our price target and valuation increases to $170 (from $165) .
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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