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Valued at a market cap of $29.5 billion, Daytona Beach, Florida-based Brown & Brown, Inc. (BRO) is a leading provider of insurance products and services. Operating in the United States, Canada, Ireland, the United Kingdom, and internationally, the company serves a diverse range of commercial, public, professional, and individual clients.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and Brown & Brown fits this criterion perfectly. Brown & Brown leverages nationwide networks of independent agents and brokers to deliver tailored insurance and risk management solutions.
However, the insurance company is down 9.6% from its 52-week high of $114.15, achieved on Nov. 27. Shares of BRO have declined marginally over the past three months, underperforming the broader Nasdaq Composite's ($NASX) 14.1% gain over the same time frame.
Nevertheless, longer term, BRO is up 45.1% on a YTD basis, outpacing NASX's nearly 34% return. Also, shares of Brown & Brown have increased 48.5% over the past 52 weeks, compared to NASX's 35.7% return over the same time frame.
Since last year, Brown & Brown has consistently traded above its 200-day moving average. However, while the stock initially held above its 50-day moving average, it has dipped below this since early December.
Shares of Brown & Brown rose 1.6% following its Q3 earnings release on Oct. 28 due to better-than-expected financial performance. The company reported adjusted earnings of $0.91 per share, beating the consensus estimate, and a 12.3% year-over-year increase in earnings. Total revenue of $1.2 billion, exceeded expectations and was driven by a 10.1% growth in commission and fees and a significant 82.4% increase in investment income. Additionally, the company achieved an expanded EBITDAC margin and generated strong cash flow, boosting investor confidence.
In comparison, rival Arthur J. Gallagher & Co. (AJG) has underperformed BRO, delivering a 25.5% return YTD and a 24.1% surge over the past 52 weeks.
Despite BRO’s strong price action over the past year, analysts remain cautiously optimistic about its prospects. Among the 16 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and it is currently trading below the mean price target of $114.71.
