Goldman Sachs analyst Robert Cox CFA has maintained their bullish stance on BRO stock, giving a Buy rating yesterday.
Robert Cox CFA has given his Buy rating due to a combination of factors including Brown & Brown’s strong organic growth and favorable margin outlook. Cox has adjusted the earnings per share (EPS) estimates for the years 2024 to 2026 upwards by 2%, reflecting an anticipation of continued financial performance exceeding market expectations. This optimistic revision is based on the company’s first-quarter results, which surpassed projections, leading to an enhanced 12-month target price with a 16% total return potential.
Cox’s analysis suggests that management’s guidance may be on the conservative side, particularly regarding margins. He foresees a higher-than-expected organic growth for the next two years, driven by robust new business gains and the potential for casualty pricing acceleration. Additionally, he anticipates that the property business segment will remain a significant growth contributor, contrary to concerns about a decelerating property catastrophe environment. Moreover, Cox anticipates a margin expansion based on operational leverage and improvements in the retail and programs margins despite certain headwinds, reinforcing the rationale behind the Buy rating for Brown & Brown.
In another report released yesterday, Truist Financial also maintained a Buy rating on the stock with a $94.00 price target.
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Brown & Brown (BRO) Company Description:
Brown & Brown, Inc. is an insurance agency, wholesale brokerage, insurance programs and service organization. It engages in the provision of insurance brokerage services and casualty insurance underwriting services. It operates through the following segments: Retail; National Programs; Wholesale Brokerage; and Services. The Retail Segment receives fees in lieu of commissions. The National Programs segment acts as a managing general agent and provides professional liability and related package products for certain professionals, a range of insurance products for individuals, flood coverage, and targeted products and services designated for specific industries, trade groups, governmental entities and market niches. The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as company’s retail agents. The Services segment provides insurance-related services, including third-party claims administration and comprehensive medical utilization management services in both the workers’ compensation and all-lines liability arenas, as well as medicare Set-aside services, social security disability and medicare benefits advocacy services and claims adjusting services. The company was founded by J. Adrian Brown and Charles Covington Owen in 1939 and is headquartered in Daytona Beach, FL.
