Mizuho cuts Aon stock price target on $17B USI acquisition
Mizuho lowered Aon's price target to $398, from $437, after the company announced its $17 billion acquisition of USI, a private-equity-backed insurance broker. Though Aon's stock is currently trading at $321.52, down 9.4% in the past week, InvestingPro analysis suggests it may be undervalued, with a Fair Value near Mizuho's target.
The $17 billion deal, expected to close in Q4 2026, will increase Aon's leverage, which now stands at $15.9 billion against a $68.2 billion market cap. USI generated $3 billion in TTM revenues, 68% from property and casualty and specialty brokerage, and 32% from employee benefits. After accounting for taxes, acquisition costs, and near-term revenue synergies, the deal equates to 22.1 times EBITDA.
Despite being dilutive in FY 2027, the purchase is projected to be accretive in FY 2028. Aon recently raised its dividend for 14 consecutive years, indicating financial discipline that could appease investors worried about dilution.
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