Brown & Brown, Inc. BRO closed at $114.79 on Wednesday, near its 52-week high of $115.34. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $105.58 and $101.30, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

Earnings have grown 21.5% in the past five years, better than the industry average of 13.7%. This Zacks Rank #3 (Hold) insurance broker's bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 8.18%.

BRO’s Encouraging Growth Projection

The Zacks Consensus Estimate for Brown & Brown’s 2025 earnings per share indicates a year-over-year increase of 8.8%. The consensus estimate for revenues is pegged at $5.21 billion, implying a year-over-year improvement of 8.4%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 8.6% and 8.3%, respectively, from the corresponding 2025 estimates.

Optimistic Analyst Sentiment on BRO

Each of the seven analysts covering the stock has raised estimates for 2025, while three have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2024 and 2025 moved 2.2% and 1.8% north, respectively, in the last 30 days.

BRO: An Outperformer

Shares of this insurance broker have gained 12.5% year to date, outperforming the industry’s growth of 10.6%, the Finance sector’s return of 4.4%  and the Zacks S&P 500 composite’s rise of 1%.

BRO Outperformed Industry, Sector, S&P

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Key Drivers of BRO

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 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 has 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. The insurance broker completed 32 acquisitions during the year ended Dec. 31, 2024, and continued to build relationships with many other companies. From 1993 through 2024, the company acquired 674 insurance intermediary operations. The Quintes buyout was the largest transaction in 2024. 

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. The strong capital position enables Brown & Brown to distribute wealth to shareholders via dividend increases. To dividend payments, the company has increased dividends for the last 30 years at a five-year (2019-2024) CAGR of 8.7%.

Key Picks

Investors interested in the insurance industry may look at some better-ranked players like Palomar Holdings, Inc. PLMR, Root, Inc. ROOT and Marsh & McLennan Companies, Inc. MMC. While Palomar Holdings and Root sport a Zacks Rank #1 (Strong Buy) each, Marsh & McLennan carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Palomar Holdings’ 2025 earnings per share and revenues implies year-over-year growth of 28.4% and 36.2%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 16.64%. In the past year, shares of PLMR have rallied 62.3%.

The Zacks Consensus Estimate for Root’s 2025 earnings per share and revenues implies year-over-year growth of 99.2% and 147.9%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 127.2%. In the past year, shares of ROOT have rallied 252.9%.

The Zacks Consensus Estimate for Marsh & McLennan’s 2025 earnings per share and revenues implies year-over-year growth of 9.2% and 9.9%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 3.1%. In the past year, shares of MMC have rallied 12.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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