Brown & Brown (BRO) AI Stock Analysis

• Market Cap: $31.48B
• Dividend Yield: 0.63%
• Average Volume (3M): 3.36M
• Price to Earnings (P/E): 27.5
• Beta (1Y): 0.47
• Revenue Growth: 11.68%
• EPS Growth: -0.17%
• Country: US
• Employees: 17,403
• Sector: Financial
• Sector Strength: 75
• Industry: Insurance - Brokers
• EPS (TTM): 1.03
• Shares Outstanding: 329,842,800
• 10 Day Avg. Volume: 2,237,118
• 30 Day Avg. Volume: 3,361,243
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 6.39
• Enterprise Value/Gross Profit: 13.10
• Enterprise Value/Ebitda: 17.68
• 1Y Price Target: $109.80
• Price Target Upside: 14.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 76 Outperform
• Price Target: $109.00 ▲(14.15% Upside)

Brown & Brown's strong financial performance and strategic acquisitions are key strengths, supporting a solid position in the insurance brokerage industry. However, technical indicators suggest bearish trends, and valuation metrics indicate potential overvaluation. The earnings call and corporate events highlight both opportunities and challenges, resulting in a balanced outlook.

Positive Factors

Earnings Quality

Brown & Brown with the highest earnings quality and free cash flow conversion of the peer group seems more oversold.

Insurance Inflation

Insurance inflation in the small to mid-sized brokerage space is expected to outpace the large account space, driving faster organic growth for Brown & Brown.

Valuation

The stock is now trading near trough valuations relative to the insurance broker peers whereas it has typically traded at a thick premium.

Negative Factors

Organic Growth

Organic growth decelerated to 3.6%, below consensus estimates of roughly 5.5%.

Property Market Risk

Weakness was attributed to a greater-than-expected deterioration in property rate and weaker-than-expected new business.

Valuation Risk

The company’s current valuation at 14.0x EBITDA equates to a multiple of 0.9x the market multiple, which is at a substantial discount to its long-term norm of 1.1x and at a level that has represented an effective floor for BRO shares.

Brown & Brown Business Overview & Revenue Model

Company Description

Brown & 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 Money

Brown & Brown generates revenue primarily through commissions and fees from insurance brokerage services. The company earns commissions as a percentage of the premiums paid by clients when they secure insurance policies through Brown & Brown. Additionally, the firm receives fees for providing consulting and advisory services related to risk management, employee benefits, and other insurance-related needs. Key revenue streams include retail brokerage, which serves small to medium-sized businesses, and national programs, which target specific industries with tailored insurance products. The company also benefits from significant partnerships with various insurance carriers, allowing them to offer a diverse range of products and competitive pricing, further contributing to their earnings.

Brown & Brown Financial Statement Overview

Summary

Brown & Brown demonstrates strong financial health with robust revenue growth and profitability margins. The balance sheet shows prudent leverage management, and cash flow statements indicate efficient cash generation. However, there are areas for improvement, such as managing cost pressures and optimizing asset utilization.

Income Statement

Brown & Brown has demonstrated robust revenue growth with a consistent upward trajectory over the years, reflected in a TTM (Trailing-Twelve-Months) revenue of $4.945 billion, up from $2.606 billion in 2020. The company maintains strong profitability margins, with a gross profit margin of 45.8% and a net profit margin of 20.3% in the TTM period. EBIT and EBITDA margins are also healthy at 28.7% and 35.3%, respectively, indicating operational efficiency. However, a slight decline in gross profit from 2024 to the TTM period suggests potential cost pressure.

Balance Sheet

The company exhibits a solid equity base, with a significant increase in stockholders' equity to $11.594 billion in the TTM period from $3.754 billion in 2020. The debt-to-equity ratio has decreased to 0.67, indicating improved leverage management. Return on equity is strong at 8.7%, reflecting effective use of equity capital. However, with an equity ratio of 45.2%, there remains room for optimizing asset utilization. The substantial cash reserves bolster financial stability, though the rise in total assets also suggests increased financial commitments.

Cash Flow

Cash flow generation remains robust, with free cash flow growing to $1.264 billion in the TTM period. The operating cash flow to net income ratio of 1.33 indicates efficient conversion of profits into cash. Free cash flow growth has been positive, supporting the company's investment and financing activities. However, the cash flow from investing activities is negative, reflecting significant capital expenditures and investments, which could impact liquidity if not managed carefully.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.91B	4.71B	4.20B	3.56B	3.05B	2.61B
Gross Profit	2.40B	2.30B	2.01B	1.75B	1.41B	1.17B
EBITDA	1.78B	1.73B	1.55B	1.21B	980.70M	817.90M
Net Income	1.01B	993.00M	870.50M	671.80M	587.10M	480.50M
Balance Sheet
Total Assets	25.64B	17.61B	14.88B	13.97B	9.80B	8.97B
Cash, Cash Equivalents and Short-Term Investments	8.89B	685.00M	711.30M	662.00M	706.10M	835.73M
Total Debt	7.78B	4.06B	4.02B	4.18B	2.25B	2.31B
Total Liabilities	14.02B	11.18B	9.30B	9.37B	5.60B	5.21B
Stockholders Equity	11.59B	6.44B	5.58B	4.61B	4.20B	3.75B
Cash Flow
Free Cash Flow	1.26B	1.09B	940.60M	828.80M	763.80M	642.30M
Operating Cash Flow	1.34B	1.17B	1.01B	881.40M	808.80M	713.00M
Investing Cash Flow	-1.01B	-898.00M	-587.00M	-1.91B	-396.70M	-759.10M
Financing Cash Flow	7.54B	-64.00M	-186.70M	1.73B	-210.10M	355.00M

Brown & Brown Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 95.49
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 95.49 is below the 20-day moving average (MA) of 95.56, below the 50-day MA of 99.94, and below the 200-day MA of 108.03, indicating a bearish trend. The MACD of -0.83 indicates Negative momentum. The RSI at 42.93 is Neutral, neither overbought nor oversold. The STOCH value of 27.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRO.

Brown & Brown Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AON	78 Outperform	$80.20B	31.14	37.99%	0.76%	18.42%	-4.44%
BRO	76 Outperform	$31.48B	27.52	11.27%	0.63%	11.68%	-0.17%
AJG	75 Outperform	$77.58B	45.61	9.49%	0.85%	15.03%	28.86%
ERIE	70 Outperform	$15.74B	28.50	31.14%	1.60%	12.19%	17.82%
Sector *	68 Neutral	$18.05B	11.73	10.24%	3.73%	9.66%	1.70%
MMC	67 Neutral	$101.00B	24.66	28.33%	1.63%	9.22%	3.05%
WTW	65 Neutral	$31.75B	227.45	1.57%	1.09%	1.27%	-84.75%

Brown & Brown Corporate Events

Brown & Brown Announces Business Segment Reorganization

On June 10, 2025, Brown & Brown, Inc. announced a reorganization of its business segments following the acquisition of RSC Topco, Inc. The company will consolidate its Programs and Wholesale Brokerage segments into a new Specialty Distribution segment, effective from the third quarter of 2025. This realignment aims to streamline operations and enhance reporting under two main segments: Retail and Specialty Distribution. The reorganization does not impact previously reported financial statements, but historical segment information has been recast to reflect the new structure.

Brown & Brown Expands Board, Appoints New Director

On August 13, 2025, Brown & Brown, Inc., a Florida corporation, expanded its Board of Directors from 13 to 14 members, appointing Joia M. Johnson as a new director. Ms. Johnson, who retired from Hanesbrands Inc. in 2021, brings extensive experience from her roles in various publicly traded companies. Her appointment is expected to enhance the company’s governance, although her specific committee assignments are yet to be determined.

Brown & Brown Completes Major Acquisition of RSC Topco

On August 1, 2025, Brown & Brown, Inc. completed its acquisition of RSC Topco, Inc., the holding company for Accession Risk Management Group, for approximately $9.825 billion. This acquisition, which involved a mix of cash and stock considerations, enhances Brown & Brown’s position in the insurance distribution industry, expanding its specialty insurance and risk management services across North America.

Brown & Brown Completes $4.2 Billion Senior Notes Issuance

On June 23, 2025, Brown & Brown, Inc. completed the issuance and sale of $4.2 billion in senior notes with varying maturity dates from 2026 to 2055. The proceeds from these notes, along with funds from a previous stock sale and cash on hand, are intended to finance the acquisition of RSC Topco, Inc. If the acquisition is not completed by the specified deadline, the company plans to use the proceeds for general corporate purposes. The issuance involves several covenants, including restrictions on incurring secured debt and asset transfers, and includes a change of control repurchase provision.

Brown & Brown Announces $4.2 Billion Notes Offering

On June 10, 2025, Brown & Brown, Inc. announced the pricing of its public offering of 39,215,686 shares of common stock, raising approximately $4 billion. The proceeds, expected to be around $3.9 billion after expenses, will be used to fund a merger with RSC Topco, Inc. and cover associated fees. Additionally, the company entered into a $4.2 billion notes offering on June 11, 2025, with the sale expected to close on June 23, 2025. These financial maneuvers are aimed at enhancing Brown & Brown’s market positioning and operational capabilities, with potential implications for stakeholders depending on the success of the merger and the company’s ability to manage increased indebtedness.

Brown & Brown Announces Acquisition of RSC Topco

On June 10, 2025, Brown & Brown, Inc. announced its agreement to acquire RSC Topco, Inc., the holding company for Accession Risk Management Group, for approximately $9.4 billion. This acquisition is expected to close in the third quarter of 2025, subject to customary conditions and regulatory approvals. The merger will enhance Brown & Brown’s market presence by integrating Accession’s specialty insurance and risk management capabilities, thereby expanding its offerings and strengthening its industry position. The transaction is anticipated to drive shareholder value through revenue and cash flow growth, while Accession’s team will join Brown & Brown’s Retail segment, contributing to its decentralized sales and service model.