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Brown & Brown (BRO)
NYSE:BRO
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Brown & Brown
(NYSE:BRO)
77Outperform
Positive Factors
Financial Performance
Adjusted EBITDAC margin expanded 110 basis points to 38.1%, reflecting cost discipline and favorable Quintes seasonality.
Revenue Growth
Organic revenue growth of 6.7% was better than the 6.3% consensus expectation.
Share Performance
Brown & Brown's share price appreciated approximately 16%, making it the best performing stock under the P&C broker coverage.
Negative Factors
Earnings Forecast
EPS forecasts fall modestly due to lower growth projections and lower investment yield expectations.
Organic Growth
Expect decelerating organic growth through 2025.
Stock Valuation
With shares at a 23.5-times 2026 P/E, a premium to peers, there are considered to be better opportunities in the sector.
Brown & Brown (BRO) vs. S&P 500 (SPY)
Market Cap
$31.70B
Dividend Yield0.52%
Average Volume (3M)1.95M
Price to Earnings (P/E)30.8
Beta (1Y)0.50
Revenue Growth12.57%
EPS Growth10.52%
CountryUS
Employees17,403
SectorFinancial
Sector Strength87
IndustryInsurance - Brokers
Share Statistics
EPS (TTM)3.59
Shares Outstanding286,607,570
10 Day Avg. Volume1,967,763
30 Day Avg. Volume1,947,973
Financial Highlights & Ratios
PEG Ratio2.93
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.23
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit16.90
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$118.00Price Target Upside6.69% Upside
Rating ConsensusHold
Number of Analyst Covering10
Brown & Brown Business Overview & Revenue Model
Company DescriptionBrown & Brown, Inc. (BRO) is a leading insurance brokerage firm that operates primarily in the United States, offering a wide range of insurance products and services. The company is divided into four main segments: Retail, National Programs, Wholesale Brokerage, and Services. Through its diverse portfolio, Brown & Brown provides risk management solutions, insurance brokerage, consulting, and administration services to individuals and businesses across various industries.
How the Company Makes MoneyBrown & Brown makes money through commissions and fees derived from the sale of insurance products and services. The company's revenue model is primarily based on earning commissions from insurance carriers for policies sold through its brokerage services. In addition to commissions, Brown & Brown generates revenue by charging clients fees for consulting, risk management, and administrative services. The company's diverse operations across its four segments allow it to cater to different market needs, enhancing its ability to generate consistent revenue streams. Strategic acquisitions and partnerships with various insurance carriers further bolster its market presence and financial performance.
Brown & Brown Financial Statement Overview
Summary
Brown & Brown demonstrates strong financial health with steady revenue growth, high profitability, and efficient cash flow management. The low leverage and solid equity base reduce financial risk, although slight pressures on operating income and asset management warrant monitoring.Income Statement
Brown & Brown shows strong revenue growth with a 3.23% increase from the previous year. The TTM gross profit margin is robust at 46.0%, and net profit margin is impressive at 21.2%, indicating strong profitability. EBITDA margin stands at 25.1%, showcasing efficient operational management. However, a decrease in EBIT from the previous year suggests some pressure on operating income.85
Very Positive
Balance Sheet
The company's balance sheet is stable with a favorable debt-to-equity ratio of 0.04, indicating low leverage and reduced financial risk. Return on Equity is strong at 15.1%, reflecting effective utilization of equity. Equity ratio at 40.8% indicates a solid equity base, but a decline in total assets year-over-year could suggest asset management challenges.78
Positive
Cash Flow
Free cash flow growth is robust with a 11.13% increase, supporting future investments and debt management. The operating cash flow to net income ratio of 1.33 suggests strong cash generation relative to net income. A free cash flow to net income ratio of 1.26 further underscores the company's strong cash position and ability to sustain operations.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.71B | 4.20B | 3.57B | 3.05B | 2.61B | Gross Profit |
| 2.30B | 2.02B | 1.76B | 1.41B | 1.17B | EBIT |
| 1.37B | 0.00 | 973.90M | 857.50M | 673.40M | EBITDA |
| 1.73B | 1.55B | 1.16B | 1.01B | 808.20M | Net Income Common Stockholders |
| 993.00M | 870.50M | 671.80M | 587.10M | 480.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 685.00M | 711.30M | 662.00M | 900.00M | 835.70M | Total Assets |
| 17.61B | 14.88B | 13.97B | 9.80B | 8.97B | Total Debt |
| 414.00M | 4.02B | 4.14B | 2.20B | 2.27B | Net Debt |
| -261.00M | 3.32B | 3.49B | 1.32B | 1.45B | Total Liabilities |
| 11.18B | 9.30B | 9.37B | 5.60B | 5.21B | Stockholders Equity |
| 6.44B | 5.58B | 4.61B | 4.20B | 3.75B |
| Cash Flow | Free Cash Flow | |||
| 1.17B | 940.60M | 828.80M | 903.00M | 650.90M | Operating Cash Flow |
| 1.17B | 1.01B | 881.40M | 948.00M | 721.60M | Investing Cash Flow |
| -898.00M | -587.00M | -1.91B | -396.70M | -759.10M | Financing Cash Flow |
| -64.00M | -186.70M | 1.73B | -349.30M | 346.40M |
Brown & Brown Technical Analysis
Negative
110.60
Price Trends
117.77
Negative
111.38
Negative
107.55
Positive
Market Momentum
-1.59
Positive
39.28
Neutral
30.81
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 110.6 is below the 20-day moving average (MA) of 116.64, below the 50-day MA of 117.77, and above the 200-day MA of 107.55, indicating a neutral trend. The MACD of -1.59 indicates Positive momentum. The RSI at 39.28 is Neutral, neither overbought nor oversold. The STOCH value of 30.81 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 37 risk factors in its most recent earnings report. Brown & Brown reported the most risks in the “Legal & Regulatory” 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
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $31.70B | 30.83 | 16.18% | 0.52% | 12.57% | 10.52% | |
73 Outperform | $115.01B | 28.51 | 30.51% | 1.42% | 7.56% | 3.39% | |
72 Outperform | $16.70B | 30.76 | 32.38% | 1.46% | 15.05% | 26.80% | |
71 Outperform | $82.01B | 49.33 | 9.46% | 0.77% | 15.21% | 46.99% | |
69 Neutral | $76.61B | 30.23 | 74.17% | 0.77% | 19.57% | -8.09% | |
65 Neutral | $30.52B | ― | -0.60% | 1.18% | 2.42% | -103.64% | |
63 Neutral | $12.46B | 9.55 | 8.14% | 17103.96% | 12.70% | -4.66% |
* Financial Sector Average
Performance Comparison
BRO
Brown & Brown
109.02
26.64
32.34%
AON
Aon
354.79
76.30
27.40%
AJG
Arthur J Gallagher & Co
320.69
84.13
35.56%
ERIE
Erie Indemnity Company
358.62
-21.49
-5.65%
MMC
Marsh & Mclennan Companies
225.47
28.98
14.75%
WTW
Willis Towers Watson
307.80
58.30
23.37%
Brown & Brown Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: -3.73%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong revenue and earnings growth, successful M&A activity, and effective cost management. However, it also highlighted challenges such as economic uncertainties and downward pressure on CAT property rates. Despite these challenges, the company's diversified portfolio and strategic acquisitions position it well for future growth.Q1-2025 Updates
Positive Updates
Strong Revenue and Earnings Growth
Brown & Brown delivered revenues of $1.4 billion, growing 11.6% in total and 6.5% organically compared to the same period in the prior year. Adjusted EBITDAC margin improved over 100 basis points to 38.1% and adjusted earnings per share grew over 13% to $1.29.
Successful M&A Activity
The company completed 13 acquisitions with estimated annual revenues of $36 million, reflecting strategic growth and expansion.
Segment Performance
Programs segment delivered organic growth of 13.6%, driven by strong new business and retention. Wholesale Brokerage segment showed organic revenue growth of 6.7% with strong performance across all lines.
Effective Cost Management
Income before income taxes increased by 17.4% due to lower interest expenses from debt repayments, and cash flow from operations improved by $200 million over the first quarter of 2024.
Negative Updates
Economic and Market Uncertainties
Uncertainty related to tariffs, inflation, and interest rates presented challenges, causing some business leaders to adopt a more cautious outlook and putting new projects on hold.
Downward Pressure on CAT Property Rates
Rates for CAT property declined faster than anticipated, down 10% to 25% during the quarter. This decline is expected to continue, potentially impacting overall revenue.
Impact of Tax Rate Increase
Effective tax rate for the quarter increased to 21.8% from 19.5% in the prior year, driven by less benefit associated with restricted stock awards.
Company Guidance
In the first quarter of fiscal year 2025, Brown & Brown, Inc. reported robust financial performance with total revenues reaching $1.4 billion, marking an 11.6% increase from the previous year. The company achieved an adjusted EBITDAC margin improvement of over 100 basis points to 38.1% and a significant growth in adjusted earnings per share by more than 13%, reaching $1.29. The company completed 13 acquisitions, contributing an estimated $36 million in annual revenues. Organic growth was noted at 6.5%, with significant performance in the Programs segment, which achieved 13.6% organic growth. The company noted a stable economic environment despite some uncertainty related to tariffs, inflation, and interest rates. Insurance pricing trends showed continued rate increases in most lines, with slight moderation in some areas, and CAT property rates showing a decline. The effective tax rate for the quarter rose to 21.8%, influenced by less benefit from vesting restricted stock awards, while dividends paid per share increased by 15.4%. Overall, the company expressed optimism for the coming quarters, citing strong market positioning and a positive economic outlook.Brown & Brown Corporate Events
Business Operations and StrategyFinancial Disclosures
Brown & Brown Releases 2024 Global Impact Report
Positive
Apr 2, 2025
On April 2, 2025, Brown & Brown released its annual Global Impact Report for the fiscal year 2024, highlighting its achievements in environmental, social, and governance (ESG) strategies. The company reported strong organic revenue growth across all segments, expanded operating margins, and increased cash flow from operations. Notable accomplishments include receiving several workplace certifications, enhancing diversity and inclusion initiatives, and providing significant support to disaster relief efforts. These efforts underscore Brown & Brown’s commitment to maintaining a strong governance position and supporting the communities it serves, aligning with its long-term goal of creating shareholder value.
Executive/Board Changes
Brown & Brown Appoints Stephen P. Hearn as COO
Neutral
Feb 25, 2025
Brown & Brown, Inc. announced the appointment of Stephen P. Hearn as Executive Vice President and Chief Operating Officer, effective March 3, 2025. Hearn, who resigned from the company’s board on February 23, 2025, brings extensive experience from his previous roles at The Ardonagh Group and other notable firms. His compensation package includes a significant annual salary, cash incentives, and long-term equity incentives. Additionally, the company has set performance-based cash incentives for 2025 for its executive officers, focusing on organic revenue growth, adjusted EBITDAC margin, and personal objectives.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.