BMO Capital analyst Michael Zaremski has maintained their bullish stance on BRO stock, giving a Buy rating today.
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Michael Zaremski has given his Buy rating due to a combination of factors including Brown & Brown’s current trading valuation and the potential for margin stability. Despite the stock trading slightly above its historical average, it remains undervalued compared to the S&P 500, suggesting a potential for price appreciation. Zaremski believes the market’s negative reaction to recent events, such as the equity raise and perceived margin pressures, is exaggerated and not fully justified by the company’s fundamentals.
Furthermore, Zaremski is optimistic about the company’s ability to maintain margin stability through profit-based contingent commissions, which are expected to increase. This is particularly relevant in the Programs segment, where Brown & Brown is highly leveraged to contingents. The analyst also anticipates that insurance inflation in the small to mid-sized brokerage space will drive faster organic growth for the company compared to larger accounts, providing additional upside potential. These factors collectively support his Buy recommendation.
In another report released today, Bank of America Securities also upgraded the stock to a Buy with a $130.00 price target.
BRO’s price has also changed moderately for the past six months – from $103.170 to $91.910, which is a -10.91% drop .