BMO upgrades to Gallagher to 'outperform' on AI productivity benefits

BMO upgrades insurance broker Arthur J. Gallagher AJG.N to "outperform" from "market perform"

Raises PT to $278 from $275, implying a 28% upside to stock's last close

Brokerage says market is pricing in slight organic growth misses and not fully appreciating the AI productivity benefits over the next 12 to 24 months

Productivity upside offsets risks associated with longer-term uncertainty as to whether business owners will seek to use AI to perform some of the consultative functions currently performed by their insurance brokers - BMO

15 of 24 brokerages rate the stock "buy" or higher and 9 "hold"; median PT $272.25 - data compiled by LSEG

As of last close, AJG stock down 16.2% YTD