Brown & Brown
BRO
$72.92
+1.17%
Brown & Brown, Inc. is a diversified insurance brokerage firm providing retail and wholesale insurance products, programs, and services to commercial, public, and individual clients, primarily in the U.S., U.K., and other international markets. As one of the largest independent insurance intermediaries in the United States, it competes with global brokers like Marsh & McLennan and Aon, but differentiates itself through a decentralized operating model and a strong focus on middle-market clients. The current investor narrative centers on the company's aggressive acquisition strategy—recently acquiring American Adventure Insurance to expand its dealer services—and its ability to sustain organic growth amid a challenging pricing environment, while also navigating the impact of higher interest rates on its balance sheet and valuation.…
BRO
Brown & Brown
$72.92
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Investment Opinion: Should I buy BRO Today?
Rating: Hold. The stock is rated 'hold' by analysts with an average target price of $76.69, implying a modest 5.2% upside. The thesis is that while the company has strong growth and profitability, the stock's underperformance and valuation concerns limit near-term upside. The core reasoning is that the market is pricing in a slowdown, and the stock may be fairly valued at current levels.
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BRO 12-Month Price Forecast
The AI assessment is neutral with medium confidence. While the company shows strong revenue growth and profitability, the negative PEG ratio and significant underperformance suggest market skepticism. The forward PE indicates expected earnings growth, but the uneven revenue pattern and analyst hold consensus temper optimism. The stock appears fairly valued with balanced risks. An upgrade to bullish would require sustained high growth and positive earnings revisions, while a downgrade to bearish would occur if growth decelerates or margins compress.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Brown & Brown's 12-month outlook, with a consensus price target around $76.69 and implied upside of +5.2% versus the current price.
Average Target
$76.69
0 analysts
Implied Upside
+5.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$60 - $90
Analyst target range
Analyst coverage is substantial with 16 analysts, and the consensus recommendation is 'hold' with a mean rating of 2.79 (where 1 is strong buy and 5 is sell). The average target price is $76.69, implying a 5.2% upside from the current price of $72.92. The distribution of ratings is not provided, but the 'hold' consensus indicates a neutral stance. The target price range is $60.00 to $90.00, with the low target suggesting a 17.7% downside and the high target implying a 23.4% upside. The wide spread of $30 reflects significant uncertainty about the company's future performance. Recent ratings actions show a mix of neutral and outperform ratings, with Morgan Stanley downgrading to underweight in July 2026, while others maintained their ratings. This mixed sentiment aligns with the hold consensus, indicating that analysts see balanced risk/reward at current levels.
Bulls vs Bears: BRO Investment Factors
Brown & Brown presents a mixed picture: strong revenue growth and profitability are offset by significant stock underperformance and a negative PEG ratio. The bull case is supported by robust organic growth, high margins, and strong cash flow, while the bear case highlights valuation concerns and inconsistent growth. Currently, the bearish evidence is slightly stronger due to the stock's persistent underperformance and the negative PEG, which may indicate market skepticism about growth sustainability. The most important tension is whether the company can maintain its high growth rate and justify its premium valuation, or if the market's pessimism is warranted. If growth continues and margins hold, the stock could re-rate higher; if not, further downside is possible.
Bullish
- Strong Revenue Growth: Q1 2026 revenue surged 37.26% YoY to $1.901B, driven by organic growth and acquisitions. This outpaces the industry average and demonstrates the success of the acquisition strategy.
- High Profitability: Net margin of 17.70% and operating margin of 28.46% in Q1 2026 indicate efficient operations and strong pricing power. These margins are well above the industry average, supporting earnings growth.
- Solid Free Cash Flow: TTM free cash flow of $1.475B provides ample liquidity for acquisitions and dividends. This financial flexibility supports the company's growth strategy and shareholder returns.
- Moderate Debt Levels: Debt-to-equity ratio of 0.63 is moderate, indicating a manageable balance sheet. This allows the company to pursue acquisitions without excessive leverage, reducing financial risk.
Bearish
- Significant Underperformance: Stock down 24.36% over the past year vs. S&P 500 +20.48%, with relative strength of -44.84%. This persistent underperformance indicates negative investor sentiment and potential structural issues.
- Negative PEG Ratio: PEG ratio of -10.20 is negative, which is unusual and may signal that the market expects a decline in earnings growth or that the growth is not sustainable. This raises concerns about the quality of growth.
- High Valuation Premium: Trailing PE of 23.44x is 6.5% above the industry average of 22x. Given the stock's underperformance, this premium may not be justified, leaving room for multiple compression.
- Uneven Revenue Growth: Revenue growth is inconsistent: Q2 2025 revenue was $1.249B, Q3 $1.606B, Q4 $1.669B, and Q1 2026 $1.901B. This volatility suggests reliance on acquisitions and potential integration risks.
BRO Technical Analysis
Brown & Brown's stock has been in a pronounced downtrend over the past year, with a 1-year price change of -24.36%, significantly underperforming the S&P 500's +20.48% gain. The current price of $72.92 sits at approximately 74.6% of its 52-week range (low of $53.81, high of $97.73), indicating the stock is closer to the lower end of its range, which could suggest a value opportunity or a falling knife depending on fundamental support. The stock's beta of 0.581 implies it is less volatile than the market, but the 1-year relative strength of -44.84% highlights persistent underperformance.
Beta
0.58
0.58x market volatility
Max Drawdown
-47.4%
Largest decline past year
52-Week Range
$54-$98
Price range past year
Annual Return
-24.4%
Cumulative gain past year
| Period | BRO Return | S&P 500 |
|---|---|---|
| 1m | +11.5% | +3.6% |
| 3m | +26.1% | +2.7% |
| 6m | +4.8% | +11.4% |
| 1y | -24.4% | +18.7% |
| ytd | -6.1% | +12.3% |
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BRO Fundamental Analysis
Revenue growth has been robust, with the most recent quarter (Q1 2026) showing revenue of $1.901 billion, a 37.26% year-over-year increase, driven by strong organic growth and acquisitions. However, the growth trajectory is uneven: Q2 2025 revenue was $1.249 billion, Q3 2025 was $1.606 billion, and Q4 2025 was $1.669 billion, indicating a deceleration from the Q1 2025 level of $1.385 billion. The Retail segment contributed $1.21 billion and Specialty Distribution $682 million, with Retail being the primary growth driver. The company's profitability is solid, with a net margin of 17.70% and an operating margin of 28.46% in the latest quarter, though gross margin fluctuated from 52.29% in Q1 2026 to 83.82% in Q4 2025, reflecting the mix of business. Net income for Q1 2026 was $426 million, up from $331 million in Q1 2025, demonstrating strong earnings growth. The balance sheet shows a debt-to-equity ratio of 0.63, which is moderate, and the company generated $1.475 billion in free cash flow over the trailing twelve months, providing ample liquidity for acquisitions and dividends. ROE stands at 8.40%, which is below the industry average, but the company's consistent cash generation supports its growth strategy.
Quarterly Revenue
$1.9B
2026-03
Revenue YoY Growth
+37.3%
YoY Comparison
Gross Margin
52.3%
Latest Quarter
Free Cash Flow
$1.5B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BRO Overvalued?
Given the positive net income, the PE ratio is the primary valuation metric. The trailing PE is 23.44x, while the forward PE is 15.12x, indicating the market expects significant earnings growth, likely from acquisitions and margin expansion. The gap between trailing and forward PE suggests a 35.5% expected increase in earnings per share. Compared to the industry average PE of 22x (based on available data), Brown & Brown trades at a slight premium of 6.5%, which is justified by its superior revenue growth and strong margins. However, the PEG ratio is negative at -10.20, which is unusual and may indicate that the market is pricing in a decline in earnings growth or that the growth rate is not sustainable. Historically, the stock's PE has ranged from a low of 12.74x in Q1 2026 to a high of 48.81x in Q4 2021, and the current trailing PE of 23.44x is near the middle of this range, suggesting the stock is fairly valued relative to its own history.
PE
23.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 17x~35x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Brown & Brown's debt-to-equity ratio of 0.63 is moderate, but the company's reliance on acquisitions for growth introduces integration risks and potential goodwill impairment. The uneven revenue growth, with Q2 2025 revenue of $1.249B versus Q1 2026 of $1.901B, suggests volatility that could impact earnings predictability. Additionally, the negative PEG ratio of -10.20 may indicate that the market expects a decline in earnings growth, which could lead to multiple compression. The company's ROE of 8.40% is below the industry average, indicating less efficient use of equity capital, which could be a concern for investors seeking higher returns.