Brown & Brown, Inc. Records Strong Growth Amid Strategic Moves
Based in Daytona Beach, Florida, Brown & Brown, Inc. (BRO) stands out in the insurance sector by offering a variety of risk management solutions, insurance products, and services tailored for individuals and businesses. With a market cap of $32 billion, the company uses its expertise and innovative strategies to help clients manage complex risks, safeguard their assets, and achieve financial security.
Stock Performance Outshines Major Indices
BRO’s shares have surged 52.2% over the past year, outperforming the broader S&P 500 Index ($SPX), which recorded a 32.1% increase. In 2024, the stock rose 26.9%, slightly ahead of SPX’s 26.2% rise year-to-date.
When compared to the SPDR S&P Insurance ETF (KIE), Brown & Brown also came out on top. The ETF has gained 37.1% over the same period.
Strategic Acquisition Enhances Growth Aspirations
On November 1, Brown & Brown finalized its acquisition of Quintes Holding B.V.’s insurance operations. This strategic decision aims to strengthen the company’s global presence and improve service capabilities, showing a commitment to long-term growth despite potential integration and regulatory hurdles.
Solid Financial Results Fuel Confidence
Following the release of its Q3 earnings on October 28, BRO’s stock increased 1.6%, reflecting confidence in its financial health. The company posted total revenues of $1.19 billion, outpacing expectations and marking an 11% year-over-year growth. Adjusted EPS rose 12.3% to $0.91, ahead of the projected $0.87. Furthermore, EBITDAC-Adjusted increased 11.9% to $414 million, showcasing effective operational execution.
For the current fiscal year concluding in December, analysts predict Brown & Brown’s EPS to grow 33.1% to $3.74 on a diluted basis. Notably, the company has consistently beaten consensus estimates in the past four quarters.
Analyst Sentiment Remains Positive
Among 15 analysts covering BRO, the consensus rating is a “Moderate Buy.” This includes six “Strong Buy” ratings, two “Moderate Buys,” six “Holds,” and one “Moderate Sell.”
This outlook is an improvement from three months ago when only five analysts designated a “Strong Buy.”
On November 21, Barclays (BCS) raised Brown & Brown’s price target from $108 to $119, citing optimistic growth assumptions following Q3 earnings and industry pricing trends, while maintaining an “Equal-Weight” rating.
Despite the stock trading at a premium to the average price target of $113, the highest estimate of $125 suggests a potential upside of 10.2% from current levels.
On the date of publication, Rashmi Kumari did not hold any positions in the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The views expressed in this article are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
