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Brown & Brown (BRO)
NYSE:BRO
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Brown & Brown
(NYSE:BRO)
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Rating:66Neutral
Price Target:
$80.00
▲(7.93% Upside)
The score is supported primarily by strong financial performance (healthy growth/profitability and a much improved balance sheet) and a generally constructive earnings outlook despite near-term integration and margin headwinds. These positives are meaningfully tempered by weak technicals (downtrend and negative momentum) and only moderate valuation support (P/E ~25 with a low dividend yield).
Positive Factors
Balance Sheet Strength
Leverage has fallen materially (debt-to-equity ~0.08 TTM), giving the company durable financial flexibility. Lower absolute and relative debt supports ongoing M&A, buybacks and dividend growth while reducing refinancing risk and improving resilience through economic cycles.
Cash Generation
Strong, consistent cash flow (FCF ~$1.45B TTM; FCF-to-net income ~1.0) underpins sustainable capital allocation. Reliable cash conversion funds acquisitions, integration costs, debt paydown, and shareholder returns without overreliance on external financing.
M&A-Driven Scale
Aggressive, repeatable acquisition capability has meaningfully expanded scale and revenue base, diversifying products and geographies. Record M&A activity plus targeted synergies provides a durable growth engine and enhances market position when integrations succeed.
Negative Factors
Organic Revenue Softness
Recent organic declines highlight underlying demand and pricing pressure risk: multiyear policies, one-time prior-year revenue recognition, and softer CAT/E&S pricing can persist across quarters, constraining sustainable organic growth even as acquisitions boost headline revenue.
Contingent Commission Volatility
Contingent commissions are a sizable and variable earnings driver tied to underwriting results and storm activity. That structural volatility makes revenue and margins less predictable over time and complicates margin sustainability and forecasting across insurance cycles.
Integration & Dilution Risk
Large, multi-year Accession integration raises execution risk and has already diluted shares and ROE. Near-term margin drag and multi-year integration through 2028, plus acquisition financing effects, can pressure per-share metrics and returns absent faster-than-expected synergy capture.
Brown & Brown (BRO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$27.18B
Dividend Yield0.77%
Average Volume (3M)2.39M
Price to Earnings (P/E)25.2
Beta (1Y)0.39
Revenue Growth17.87%
EPS Growth-9.35%
CountryUS
Employees17,403
SectorFinancial
Sector Strength70
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)0.93
Shares Outstanding341,420,780
10 Day Avg. Volume2,398,214
30 Day Avg. Volume2,390,057
Financial Highlights & Ratios
PEG Ratio2.17
Price to Book (P/B)4.47
Price to Sales (P/S)6.11
P/FCF Ratio26.35
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue4.15
Enterprise Value/Gross Profit6.95
Enterprise Value/Ebitda11.95
Forecast
1Y Price Target
$85.80Price Target Upside15.76% Upside
Rating ConsensusHold
Number of Analyst Covering12
EPS Forecast (FY)4.63
Revenue Forecast (FY)$7.31B
Brown & Brown Business Overview & Revenue Model
Company DescriptionBrown & Brown, Inc. markets and sells insurance products and services in the United States, Bermuda, Canada, Ireland, the United Kingdom, and the Cayman Islands. It operates through four segments: Retail, National Programs, Wholesale Brokerage, and Services. The Retail segment offers property and casualty, employee benefits insurance products, personal insurance products, specialties insurance products, loss control survey and analysis, consultancy, and claims processing services. It serves commercial, public and quasi-public entities, professional, and individual customers. The National Programs segment offers professional liability and related package insurance products for dentistry, legal, eyecare, insurance, financial, physicians, real estate title professionals, as well as supplementary insurance products related to weddings, events, medical facilities, and cyber liabilities. This segment also offers outsourced product development, marketing, underwriting, actuarial, compliance, and claims and other administrative services to insurance carrier partners; and commercial and public entity-related programs, and flood insurance products. It serves through independent agents. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance through independent agents and brokers. The Services segment offers third-party claims administration and medical utilization management services in the workers' compensation and all-lines liability arenas, Medicare Set-aside, Social Security disability, Medicare benefits advocacy, and claims adjusting services. The company was founded in 1939 and is headquartered in Daytona Beach, Florida.
How the Company Makes MoneyBrown & Brown generates revenue primarily through commissions and fees earned from the sale of insurance products and services. The company acts as an intermediary between clients and insurance carriers, receiving a commission based on the premiums paid by clients for their insurance policies. Additionally, it earns revenue through consulting services, providing risk management advice, and other related services. The company's revenue model is further supported by its strategic acquisitions of smaller brokerage firms, which not only expand its market reach but also enhance its service offerings. Significant partnerships with various insurance carriers also play a crucial role in its earnings by allowing Brown & Brown to offer a wide range of products tailored to the needs of its clients.
Brown & Brown Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much revenue each business segment generates, indicating the company's diverse income streams and potential areas for expansion or risk.
Shows how much revenue each business segment generates, indicating the company's diverse income streams and potential areas for expansion or risk.
Data provided by:
The Fly
The FlyBrown & Brown Earnings Call Summary
Earnings Call Date:Jan 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 27, 2026
Earnings Call Sentiment Positive
The call emphasized strong overall financial performance (23% full-year revenue growth, improved margins, >$1.45B cash from operations, record M&A) and constructive long-term positioning (raised margin targets, integration synergies). Headwinds were largely tied to acquisition phasing (Accession below quarterly guidance), quarter-to-quarter organic softness driven by prior-year flood revenue recognition, moderation in CAT/E&S pricing, contingent commission variability, and a notable recruiting event where a start-up took ~275 teammates and $23M of client revenue. Management provided guidance on margin pressure from lower investment income and potential near-term impacts but highlighted robust cash generation, disciplined capital deployment and confidence in integration and organic improvement in 2026.Q4-2025 Updates
Positive Updates
Strong Top-Line Growth
Total revenues for FY2025 were $5.9 billion, up 23% year-over-year; fourth-quarter revenues were $1.607 billion, up 35.7% year-over-year.
Improved Profitability and EPS
Full-year adjusted EBITDAC margin was ~36%, up 70 basis points; adjusted diluted net income per share grew >10% to $4.26 for the year. Fourth-quarter adjusted EPS grew 8.1% to $0.93.
Very Strong Cash Generation
Generated $1.450 billion of cash from operations in FY2025, an increase of 23.5% year-over-year; cash-flow-to-revenue ratio improved to 24.6%.
Record M&A Activity and Accession Integration
Completed 43 acquisitions in FY2025 adding ~ $1.8 billion of annual revenue, including the largest acquisition (Accession). Accession added ~405 million revenue in Q4 and the company welcomed over 5,000 teammates from Accession (over 6,000 total new teammates added in the year).
Contingent Commissions Boost
Contingent commissions represented over $250 million of revenue in 2025 and grew by $37 million in Q4 (with $21 million coming from Accession), materially supporting margins and cash flow.
Capital Allocation Actions
Paid down $100 million on the revolving credit facility and repurchased $100 million of common stock in Q4; dividends per share increased 10% versus Q4 2024.
Margin Target Raised
Company increased long-term adjusted EBITDAC margin target range from 30%–35% to 32%–37%, reflecting expected synergies, increased contingents and business mix changes.
Integration Synergies and Timeline
Integration progress for Accession described as positive; expecting EBITDA synergies of ~$30–40 million in 2026 and integration completion targeted by end of 2028.
Negative Updates
Organic Revenue Softness in Q4
Consolidated organic revenue decreased 2.8% in Q4 2025; Specialty Distribution organic revenue declined 7.8% in Q4 (primarily due to recognition of $28 million of flood claims processing revenue in Q4 2024 and weaker CAT property pricing).
Accession Below Quarterly Guidance and Margin Impact
Accession contributed ~ $405 million in Q4 versus guidance of $430–$450 million, lowering Q4 adjusted EPS by ~ $0.05 and reducing company margins by ~200 basis points for the quarter; Accession seasonality negatively impacted FY25 margin by ~80 basis points.
One-Time Items and Multiyear Policies Weighing on Retail
Retail organic growth in Q4 was 1.1% but was negatively impacted by multiyear policies and larger-than-expected incentive commission adjustments and project delays, which collectively reduced organic growth by ~100–150 basis points.
Exposure to Softening CAT and E&S Pricing
E&S property rate changes were generally down 15%–30%; non-CAT property blended rates were roughly flat but varied by experience, and CAT property rates are moderating — headwinds for segments with CAT exposure.
Talent Poaching and Client Losses
A start-up U.S. broker hired ~275 former teammates and took clients representing known annual revenues of $23 million; company has obtained an injunction and is pursuing legal remedies, but retention and client erosion risk remains.
Contingent Commissions and Future Variability
Contingent commissions are volatile by quarter; company expects Specialty Distribution contingents to be down ~ $15 million in 2026 due to one-time adjustments, and contingents remain dependent on underwriting and storm activity.
Lower Investment Income and Margin Pressure in 2026
Management forecasts lower investment income in 2026 (due to cash deployed for acquisition and lower rates), which will put downward pressure on total margins even if underlying operations remain flat.
Dilution from Acquisition Financing
Weighted average shares outstanding increased by ~55 million to 339 million in Q4 (primarily due to Accession consideration), creating dilution that offsets some per-share gains.
Integration Timeline and Near-Term Seasonality Risk
Integration is in early stages with synergies expected in 2026, but management warns of modest negative margin impact from Accession in Q1 and that full integration will extend through 2028, exposing near-term execution and seasonality risks.
Company Guidance
Guidance focused on Accession, margins, contingents and longer‑term targets: Accession’s revenue and profit are now expected to be roughly equally weighted H1/H2 (with H2 skewed to Q3), and its Q4 miss ($405M vs prior $430–450M guidance) reduced Q4 EPS by about $0.05 and lowered company margins by ~200 bps; Accession is expected to have a modest negative impact on adjusted margins in Q1. Management expects $30–40M of EBITDA synergies in 2026, integration to complete by end of 2028, and to remain active on M&A; contingent commissions (which represented >$250M of revenue in 2025) will fluctuate but Specialty Distribution contingents are anticipated to be down ~$15M in 2026. For 2026 they expect lower investment income to put downward pressure on total margins while the underlying business should be relatively flat on margins, Retail organic growth to modestly improve from 2.8% in 2025, Specialty Distribution to be somewhat flat in Q1 with pickup later, an effective tax rate of ~24%–25%, and a raised long‑term adjusted EBITDAC margin target of 32%–37%.Brown & Brown Financial Statement Overview
Summary
Overall financials are strong: income statement and balance sheet quality are high (solid growth, strong margins, and sharply improved leverage with debt-to-equity ~0.08 TTM). The main offsets are a step-down in TTM net margin vs 2024 and a weaker cash-flow-to-debt profile historically (though mitigated by the much lower current debt level).Income Statement
Income performance is strong, supported by solid growth and consistently high profitability. Revenue rose from $2.6B (2020) to $4.7B (2024), and is $5.9B in TTM (Trailing-Twelve-Months), with the TTM revenue growth rate at 10.9%. Profitability remains attractive with TTM operating profit margin at ~28.5% and net profit margin at ~17.8%. The main watch-out is some margin normalization versus 2024 (net margin ~21.1% in 2024 vs. ~17.8% TTM), indicating profitability can fluctuate even as revenue expands.86
Very Positive
Balance Sheet
The balance sheet has strengthened materially, with leverage improving sharply in TTM (Trailing-Twelve-Months). Total debt declines from roughly $4.0–$4.2B (2022–2024) to $1.0B TTM, while equity increases to $12.6B TTM (vs. $6.4B in 2024), driving debt-to-equity down to ~0.08 TTM (from ~0.63 in 2024). Returns on equity are solid but have eased to ~9.7% TTM from mid-teens levels in 2021–2024, suggesting the higher equity base is diluting returns unless earnings continue to scale.84
Very Positive
Cash Flow
Cash generation is generally healthy with good conversion of earnings into cash. Free cash flow is $1.45B in TTM (Trailing-Twelve-Months) and has grown 7.6% TTM, and free cash flow tracks net income closely (free cash flow to net income ~1.0 TTM; ~0.90–0.95 historically). The key weakness is that operating cash flow is modest relative to total debt across periods (operating cash flow to total debt ~0.17–0.36 historically and ~0.17 TTM), though this risk is somewhat mitigated by the much lower absolute debt level in TTM.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.91B | 4.71B | 4.20B | 3.56B | 3.05B | 2.61B |
| Gross Profit | 3.52B | 2.30B | 2.01B | 1.75B | 1.41B | 1.17B |
| EBITDA | 2.05B | 1.73B | 1.55B | 1.21B | 980.70M | 817.90M |
| Net Income | 1.05B | 993.00M | 870.50M | 671.80M | 587.10M | 480.50M |
Balance Sheet | ||||||
| Total Assets | 29.99B | 17.61B | 14.88B | 13.97B | 9.80B | 8.97B |
| Cash, Cash Equivalents and Short-Term Investments | 1.08B | 685.00M | 711.00M | 662.00M | 706.10M | 835.73M |
| Total Debt | 961.00M | 4.06B | 4.02B | 4.18B | 2.25B | 2.31B |
| Total Liabilities | 17.42B | 11.18B | 9.30B | 9.37B | 5.60B | 5.21B |
| Stockholders Equity | 12.57B | 6.44B | 5.58B | 4.61B | 4.20B | 3.75B |
Cash Flow | ||||||
| Free Cash Flow | 1.45B | 1.09B | 941.00M | 829.00M | 763.80M | 642.30M |
| Operating Cash Flow | 1.45B | 1.17B | 1.01B | 881.00M | 808.80M | 713.00M |
| Investing Cash Flow | -7.91B | -898.00M | -587.00M | -1.91B | -396.80M | -759.10M |
| Financing Cash Flow | 7.71B | -64.00M | -187.00M | 1.73B | -210.10M | 355.00M |
Brown & Brown Technical Analysis
Negative
74.12
Price Trends
79.73
Negative
84.44
Negative
95.05
Negative
Market Momentum
-0.73
Positive
31.57
Neutral
52.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRO, the sentiment is Negative. The current price of 74.12 is below the 20-day moving average (MA) of 79.26, below the 50-day MA of 79.73, and below the 200-day MA of 95.05, indicating a bearish trend. The MACD of -0.73 indicates Positive momentum. The RSI at 31.57 is Neutral, neither overbought nor oversold. The STOCH value of 52.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRO.
Brown & Brown Risk Analysis
Brown & Brown disclosed 41 risk factors in its most recent earnings report. Brown & Brown reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brown & Brown Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $13.07B | 22.81 | 30.44% | 1.90% | 9.64% | 15.87% | |
70 Outperform | $30.83B | 15.37 | 27.79% | 1.14% | ― | ― | |
69 Neutral | $65.59B | 40.64 | 9.05% | 1.01% | 17.17% | 19.12% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
66 Neutral | $27.18B | 25.20 | 10.99% | 0.77% | 17.87% | -9.35% | |
66 Neutral | $72.84B | 27.14 | 38.33% | 0.82% | 14.06% | 5.52% |
* Financial Sector Average
BRO
Brown & Brown
74.12
-28.39
-27.69%
AON
Aon
330.75
-32.99
-9.07%
AJG
Arthur J Gallagher & Co
242.33
-49.22
-16.88%
ERIE
Erie Indemnity Company
272.50
-114.79
-29.64%
WTW
Willis Towers Watson
314.32
-7.49
-2.33%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.