William Blair analyst Adam Klauber has maintained their neutral stance on BRO stock, giving a Hold rating today.
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Adam Klauber has given his Hold rating due to a combination of factors affecting Brown & Brown’s performance. The company’s second-quarter cash EPS exceeded expectations, primarily due to interest income and contingents. However, the organic growth rate fell short of both the firm’s and consensus estimates, indicating a slowdown across the business segments, particularly in retail, which saw its lowest growth since 2020.
Despite the anticipated stabilization or slight improvement in retail organic growth, challenges persist due to the deterioration in property rates and weaker-than-expected new business. The upcoming Accession deal is expected to have mixed effects, with contributions being offset by share dilution and increased interest expenses. Furthermore, Brown & Brown’s current trading valuation aligns with peers, lacking the historical premium it once enjoyed. These factors contribute to the Hold rating, as the company is expected to underperform its peers in organic growth through the latter half of the year.
In another report released today, Barclays also maintained a Hold rating on the stock with a $108.00 price target.