Deutsche Bank Reaffirms Hold On Shares Of Aon Plc, Sees Slight Upside
In a research report released Monday, Deutsche Bank analyst Joshua Shanker reaffirmed a Hold rating on Aon Plc (NYSE:AON) with an $88 price target, which represents a slight upside potential from current levels.
Shanker observed, “Aon seems poised for a 19% tax rate in 2014 compared to a 25% tax rate in 2013. After-tax earnings are growing at a 13% clip, but pre-tax earnings are weaker at 4%. It is unlikely that Aon can shed another 600bps of tax burden next year, which means the company will need to grow pre-tax income to grow after tax income. Further, as tax avoidance strategies increasingly become political fodder, we question whether Aon’s tax structure is as durable as its overall business. We believe Aon shares are fairly valued, given the risk that its tax advantage may not be permanent.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Shanker has a total average return of 8.8% and a 57.4% success rate. Shanker is ranked #657 out of 3355 analysts.