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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.
