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Keefe, Bruyette & Woods raised its price target on Brown & Brown (NYSE:BRO) to $102.00 from $100.00 on Friday, while maintaining an Underperform rating on the insurance brokerage firm’s shares.
The price target increase follows Brown & Brown’s announced acquisition of Accession, which KBW expects to close in mid-third quarter 2025. The research firm raised its 2025 and 2026 earnings per share estimates to $4.15 and $4.75, respectively, up from previous estimates of $4.10 and $4.50.
KBW also introduced its initial 2027 earnings per share estimate of $5.25 for the insurance broker. The revised earnings projections mostly reflect higher deal-related revenue and earnings, partially offset by higher interest expense and share counts.
Despite the price target increase, KBW maintained its Underperform rating on Brown & Brown stock. The research firm cited expectations of near-term organic growth pressure that could constrain the shares.
KBW specifically noted that second-quarter 2025 property rate decreases will be compared against solid rate increases from second-quarter 2024, creating challenging year-over-year comparisons for the company.
In other recent news, Brown & Brown has announced plans to acquire Accession Risk Management in a deal valued at $9.825 billion, with the transaction expected to close in the third quarter of 2025. The company has also priced a $4 billion common stock offering at $102.00 per share to help fund this acquisition. This offering is projected to net approximately $3.9 billion after expenses. BMO Capital has raised its price target for Brown & Brown to $122, maintaining an Outperform rating, following the acquisition announcement. However, Goldman Sachs has downgraded Brown & Brown from Buy to Neutral, lowering the price target to $119, anticipating the company’s growth to align more closely with its peers. Brown & Brown’s acquisition of Accession Risk is expected to enhance its business portfolio, with potential benefits including expanded niche solutions and increased shareholder value. The acquisition will integrate Accession’s Risk Strategies into Brown & Brown’s Retail segment and create a new Specialty Distribution segment. The company continues to pursue growth through strategic mergers and acquisitions, as highlighted by these recent developments.
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