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Brown & Brown Stock Rallies 43.7% YTD: More Room for Upside?
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Shares of Brown & Brown, Inc. (BRO - Free Report) have rallied 43.7% year to date (YTD), outperforming the industry’s 33% growth. The insurer also outperformed the Zacks S&P 500 composite and the Finance sector’s return of 16.3% and 12%, respectively, in the same time frame. With a market capitalization of $29.14 billion, the average volume of shares traded in the last three months was 1.14 million. Currently priced at $102.17, the stock is a little below its 52-week high of $106.02.
BRO Outperforms Industry, Sector & S&P YTD
Image Source: Zacks Investment Research
The expected long-term earnings growth is 11.7%. Earnings have grown 18.4% in the past five years, better than the industry average of 13.2%. This Zacks Rank #2 (Buy) insurance broker's bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 9.82%.
BRO Trading Above 50-Day Moving Average
The stock is trading above the 50-day and 200-day simple moving average (SMA) of $99.05 and $86.24, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
BRO’s Growth Projection Encourages
The Zacks Consensus Estimate for Brown & Brown’s 2024 earnings per share indicates a year-over-year increase of 30.9%. The consensus estimate for revenues is pegged at $4.70 billion, implying a year-over-year improvement of 10.3%. The consensus estimate for 2025 earnings per share and revenues indicates an increase of 8.6% and 8.1%, respectively, from the corresponding 2024 estimates.
Optimistic Analyst Sentiment on BRO
Each of the six analysts covering the stock has raised estimates for 2024 and 2025 over the past 60 days. Thus, the Zacks Consensus Estimate for 2024 and 2025 moved 1.9% and 2.5% north, respectively, in the last 60 days.
Can the Stock Retain the Momentum?
Commissions and fees, the main component of the top line, benefit from increasing new business, strong retention and continued rate increases for most lines of coverage. The top line witnessed a five-year annual growth rate of 14%. The company met its intermediate annual revenue goal of $4 billion, doubling in the last five years.
The insurance broker continually makes investments in boosting organic growth and margin expansion. It boasts an industry-leading adjusted EBITDAC margin.
Brown & Brown’s strategic buyouts help it capitalize on growing market opportunities, strengthen its compelling products and service portfolio, expand global reach and accelerate its growth rate. For the second quarter of 2024, the insurance broker completed 10 acquisitions with estimated annual revenues of $13 million and continued to build relationships with many other companies. From 1993 through the second quarter of 2024, the insurance broker acquired 660 insurance intermediary operations.
Banking on operational expertise, BRO boasts a strong liquidity position with an improving leverage ratio. The strength of its operating model and diversity of businesses ensures strong cash conversion. The company effectively deploys cash into acquisitions, capital expenditure and wealth distribution for shareholders via dividend increases.
BRO has an impressive dividend history, raising dividends for 30 straight years. Its five-year annualized dividend growth is 10.89%, and its dividend yield is 0.5%.
Arthur J. Gallagher has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 1.93%. Shares of AJG have rallied 31.9% YTD.
The Zacks Consensus Estimate for AJG’s 2024 and 2025 earnings implies year-over-year growth of 15.9% and 12%, respectively.
Marsh & McLennan has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 5.80%. Shares of MMC have jumped 21.4% YTD.
The Zacks Consensus Estimate for MMC’s 2024 and 2025 earnings implies year-over-year growth of 9.3% and 7.9%, respectively.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 and 2025 earnings implies year-over-year growth of 31.1% and 21.9%, respectively. Shares of RYAN have rallied 47.7% YTD.
The Zacks Consensus Estimate for RYAN’s 2024 and 2025 earnings has moved 2.2% and 3.2% north, respectively, in the past 60 days, reflecting analysts’ optimism.
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Shares of Brown & Brown, Inc. (BRO - Free Report) have rallied 43.7% year to date (YTD), outperforming the industry’s 33% growth. The insurer also outperformed the Zacks S&P 500 composite and the Finance sector’s return of 16.3% and 12%, respectively, in the same time frame. With a market capitalization of $29.14 billion, the average volume of shares traded in the last three months was 1.14 million. Currently priced at $102.17, the stock is a little below its 52-week high of $106.02.
BRO Outperforms Industry, Sector & S&P YTD
Image Source: Zacks Investment Research
The expected long-term earnings growth is 11.7%. Earnings have grown 18.4% in the past five years, better than the industry average of 13.2%. This Zacks Rank #2 (Buy) insurance broker's bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 9.82%.
BRO Trading Above 50-Day Moving Average
The stock is trading above the 50-day and 200-day simple moving average (SMA) of $99.05 and $86.24, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
BRO’s Growth Projection Encourages
The Zacks Consensus Estimate for Brown & Brown’s 2024 earnings per share indicates a year-over-year increase of 30.9%. The consensus estimate for revenues is pegged at $4.70 billion, implying a year-over-year improvement of 10.3%. The consensus estimate for 2025 earnings per share and revenues indicates an increase of 8.6% and 8.1%, respectively, from the corresponding 2024 estimates.
Optimistic Analyst Sentiment on BRO
Each of the six analysts covering the stock has raised estimates for 2024 and 2025 over the past 60 days. Thus, the Zacks Consensus Estimate for 2024 and 2025 moved 1.9% and 2.5% north, respectively, in the last 60 days.
Can the Stock Retain the Momentum?
Commissions and fees, the main component of the top line, benefit from increasing new business, strong retention and continued rate increases for most lines of coverage. The top line witnessed a five-year annual growth rate of 14%. The company met its intermediate annual revenue goal of $4 billion, doubling in the last five years.
The insurance broker continually makes investments in boosting organic growth and margin expansion. It boasts an industry-leading adjusted EBITDAC margin.
Brown & Brown’s strategic buyouts help it capitalize on growing market opportunities, strengthen its compelling products and service portfolio, expand global reach and accelerate its growth rate. For the second quarter of 2024, the insurance broker completed 10 acquisitions with estimated annual revenues of $13 million and continued to build relationships with many other companies. From 1993 through the second quarter of 2024, the insurance broker acquired 660 insurance intermediary operations.
Banking on operational expertise, BRO boasts a strong liquidity position with an improving leverage ratio. The strength of its operating model and diversity of businesses ensures strong cash conversion. The company effectively deploys cash into acquisitions, capital expenditure and wealth distribution for shareholders via dividend increases.
BRO has an impressive dividend history, raising dividends for 30 straight years. Its five-year annualized dividend growth is 10.89%, and its dividend yield is 0.5%.
Other Stocks to Consider
Some other top-ranked stocks from the insurance brokerage industry are Arthur J. Gallagher (AJG - Free Report) , Marsh & McLennan Companies, Inc. (MMC - Free Report) and Ryan Specialty Holdings Inc. (RYAN - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arthur J. Gallagher has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 1.93%. Shares of AJG have rallied 31.9% YTD.
The Zacks Consensus Estimate for AJG’s 2024 and 2025 earnings implies year-over-year growth of 15.9% and 12%, respectively.
Marsh & McLennan has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 5.80%. Shares of MMC have jumped 21.4% YTD.
The Zacks Consensus Estimate for MMC’s 2024 and 2025 earnings implies year-over-year growth of 9.3% and 7.9%, respectively.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 and 2025 earnings implies year-over-year growth of 31.1% and 21.9%, respectively. Shares of RYAN have rallied 47.7% YTD.
The Zacks Consensus Estimate for RYAN’s 2024 and 2025 earnings has moved 2.2% and 3.2% north, respectively, in the past 60 days, reflecting analysts’ optimism.