Daytona Beach, Florida-based Brown & Brown, Inc. (BRO) markets and sells insurance products and services in the U.S. and internationally. Valued at $34.3 billion by market cap, the company operates through Retail, Programs, Wholesale Brokerage, and Services segments.
Companies worth $10 billion or more are generally described as “large-cap stocks,” Brown & Brown fits right into that category, with its market cap exceeding the threshold, reflecting its substantial size, dominance, and influence in the insurance brokerage industry.
Brown & Brown touched its all-time high of $121.25 on Mar. 10 and is currently trading 1.2% below that peak. Meanwhile, BRO stock has surged 16.4% over the past three months, significantly outperforming the Dow Jones Industrials Average’s ($DOWI) 2.1% dip during the same time frame.
BRO’s performance looks even more impressive over the longer term. BRO stock has soared 18.6% over the past six months and 38.2% over the past 52 weeks, notably outpacing Dow’s 26 bps dip over the past six months and 6.2% gains over the past year.
To confirm the bullish trend, BRO has traded consistently above its 200-day moving average and mostly above its 50-day moving average with some fluctuations over the past year.
Despite outperforming Street’s expectations, Brown & Brown’s stock dropped 2.6% in the trading session after the release of its Q4 results on Jan. 27. Driven by solid organic growth, the company’s total revenues surged 15.4% year-over-year to $1.2 billion, exceeding the Street’s expectations by 6.4%. Meanwhile, driven by notable margin expansion, BRO’s adjusted EBITDAC grew 22.6% year-over-year to $390 million. Furthermore, the company reported a 24.6% year-over-year growth in adjusted EPS to $0.86, surpassing the consensus estimates by 14.7%.
However, due to the company’s aggressive acquisition spree, Brown & Brown has observed a notable increase in debt and goodwill on its balance sheet which could have settled investor confidence.
Although Brown & Brown has lagged behind its peer Arthur J. Gallagher & Co.’s (AJG) 21.2% gains over the past six months, it has notably outperformed AJG’s 30.7% returns over the past year.
Among the 16 analysts covering the BRO stock, the consensus rating is a “Moderate Buy.” As of writing the stock is traded slightly above its mean price target of $116.64.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
