Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.8 |
| P/S | 7.5 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 7.3 |
| PEG | 3.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.1x
- ▸PEG: 2.71
AON · Why this verdict
Why Aon (AON) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Aon is a high-return insurance broker (ROE 43%, 22% margins) with insider buying and a dividend-aristocrat record, but the price of $321.67 is essentially at the $323.05 analyst target, growth is slow and estimates are trending down.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Aon earns a 43% return on equity with 22% margins and a 7/9 Piotroski F-Score, showing a high-quality business. Quality breakdown | ROE stays above 35% and margins stay near 22% over the next 12 months. | ↑Improving |
| CounterROE is inflated by high leverage (debt-to-equity 2.8), so returns can fall sharply if earnings weaken. | ||
The price of $321.67 is only 0.4% below the $323.05 analyst target, leaving almost no upside against 15% downside. Targets | Analyst targets are raised above $350 or the price consolidates above the $305.63 stop. | ↓Deteriorating |
| CounterAnalyst targets lag, and a rising earnings base could justify higher targets, but at present the reward-to-risk is 0.03. | ||
Insiders made 6 purchases worth about $6.5M over 90 days with no sales, a bullish signal. Insider | Net insider activity stays positive with no material selling over the next 2 quarters. | →Stable |
| CounterThe purchases were only 0.010% of market cap, so the signal is small and may not reflect conviction. | ||
Growth scores only 3.1/10 on revenue and earnings, earnings estimates are trending down, and leverage carries a penalty at a debt-to-equity of 2.8. Bear case | Earnings estimates stabilize and growth score rises above 5.0. | ↓Deteriorating |
| CounterFalling estimates combined with high leverage could pressure the valuation of a stock at 15.9x forward earnings. | ||
The stock shows an overbought rally (RSI 85) while still below a falling 200-day average (slope -2.8% per 30 days), with rising volume. Momentum breakdown | The price reclaims the 200-day average on sustained buying volume. | ↓Deteriorating |
| CounterA rally from a downtrend that reaches RSI 85 is stretched and often fades back toward trend. | ||
Aon earns a 43% return on equity with 22% margins and a 7/9 Piotroski F-Score, showing a high-quality business.
↑ImprovingQuality breakdown
- Expectation
- ROE stays above 35% and margins stay near 22% over the next 12 months.
CounterROE is inflated by high leverage (debt-to-equity 2.8), so returns can fall sharply if earnings weaken.
The price of $321.67 is only 0.4% below the $323.05 analyst target, leaving almost no upside against 15% downside.
↓DeterioratingTargets
- Expectation
- Analyst targets are raised above $350 or the price consolidates above the $305.63 stop.
CounterAnalyst targets lag, and a rising earnings base could justify higher targets, but at present the reward-to-risk is 0.03.
Insiders made 6 purchases worth about $6.5M over 90 days with no sales, a bullish signal.
→StableInsider
- Expectation
- Net insider activity stays positive with no material selling over the next 2 quarters.
CounterThe purchases were only 0.010% of market cap, so the signal is small and may not reflect conviction.
Growth scores only 3.1/10 on revenue and earnings, earnings estimates are trending down, and leverage carries a penalty at a debt-to-equity of 2.8.
↓DeterioratingBear case
- Expectation
- Earnings estimates stabilize and growth score rises above 5.0.
CounterFalling estimates combined with high leverage could pressure the valuation of a stock at 15.9x forward earnings.
The stock shows an overbought rally (RSI 85) while still below a falling 200-day average (slope -2.8% per 30 days), with rising volume.
↓DeterioratingMomentum breakdown
- Expectation
- The price reclaims the 200-day average on sustained buying volume.
CounterA rally from a downtrend that reaches RSI 85 is stretched and often fades back toward trend.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.6 |
| Gross margin | 5.7 |
| Op margin | 8.9 |
| Net margin | 10.0 |
| Current ratio | 5.8 |
| FCF quality | 7.6 |
| Moat | 5.6 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 43%
- ▸Strong margins: 22%
- ▸Strong Piotroski F-Score: 7/9
Growth
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
| EPS growth | 3.1 |
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 0.0 |
- ▸Overbought (RSI 81)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 81 (late-cycle distribution risk)
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 7.5 |
| Price target | 5.9 |
Insider
7.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $6,549,688 (0.009% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.9 |
| quality rank | 8.9 |
| growth rank | 2.0 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 1.0 |
| 52w position | 8.0 |
| gap | 5.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.2 |
| days to cover | 9.3 |
| volatility | 6.0 |
| put call | 7.4 |
| implied vol | 6.6 |
| max pain risk | 3.0 |
| beta | 9.3 |
| debt equity | 2.2 |
- ▸Above max pain $185
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.3 |
| dividend safety | 8.5 |
| news activity | 6.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:85d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (1)
- DEATH_CROSS:momentum=6.3>=5.0 recovering
Reward-to-Risk
-0.30
Upside
-4.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 81
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.30 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.5, Quality at 7.2, and Sentiment at 6.6; the weakest are Growth at 3.1, Technical at 3.7, and Peer rank at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.30 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Return Quality Franchise
Trip ifReturn on equity falls below 30% from current 43%.
- P2Price At Analyst Target
Trip ifPrice falls below the $305.63 stop level.
- P3Insider Buying Signal
Trip ifNet insider selling exceeds $5M over a 90-day period.
- P4Slow Growth And Leverage
Trip ifDebt-to-equity rises above 3.5 from current 2.8.
- P5Overbought Rally Below Trend
Trip ifRSI drops below 40 while the price stays below the 200-day average.