Arthur J. Gallagher's (AJG) adoption of AI may help speed its acquisition pipeline, supported by the company's ability to invest heavily in technology, RBC Capital Markets said Wednesday in a report.

AI-driven margin savings may strengthen Gallagher's ability to pursue acquisitions, with 30 late-stage term sheets representing about $400 million of revenue, the report said.

"We believe large brokers are net AI winners, noting ample cash flow to spend on tech," RBC said.

At an investor meeting, management said organic guidance "was tweaked modestly lower" after folding AssuredPartners expectations into Q4 results, according to the report.

While the company has few near-term catalysts, investors will likely continue to focus on Gallagher's property-and-casualty exposure and its position as an industry leader, RBC said.

RBC lowered its price target on Gallagher stock to $290 from $310 and maintained its outperform rating.

Price: 228.31, Change: -1.33, Percent Change: -0.58