What the bad jobs report means for markets
On Tuesday, CFRA maintained a Hold rating on Brown & Brown (NYSE:BRO) shares, while increasing the 12-month price target from $112.00 to $117.00. CFRA's analyst cited the company's strong fourth quarter performance and raised earnings per share (EPS) estimates as the basis for the price target adjustment.
Brown & Brown's fourth quarter adjusted EPS of $0.86 exceeded both CFRA's $0.78 estimate and the consensus view of $0.77, driven by a 15% revenue growth that surpassed the analyst's 10%-15% growth forecast. This growth included an impressive 14% rate of organic growth, which stands above the average for peers.
For the full year of 2024, Brown & Brown's EPS was $3.84, aligning with the consensus view and outperforming CFRA's $3.76 estimate. This was achieved despite asset disposal losses of $0.02 compared to the previous year's $0.35. The company's revenues saw a 13% increase in 2024, with organic growth contributing 10%. Looking ahead, CFRA expects revenue growth of 10%-15% in 2025, supported by favorable insurance pricing and demand conditions.
The analyst raised the '26 EPS estimate by $0.10 to $4.50 and the '25 EPS estimate by $0.05 to $4.10. These adjustments reflect the company's valuation at 26 times the '26 EPS estimate and 28.5 times the '25 EPS estimate. The valuation compares to a 1-year average forward multiple of 25 times and a peer average of 22.5 times.
CFRA's analyst concluded that despite Brown & Brown's lack of margin improvement and its premium valuation relative to its peers, the stock is considered fairly valued. The recommendation to hold the shares is based on solid insurance industry fundamentals.
In other recent news, insurance brokerage firm Brown & Brown has been catching attention with its robust financial performance and promising projections. The firm recently reported a revenue of nearly $1.2 billion for the third quarter, marking an 11% increase from the previous year, and a significant 9.5% organic growth. Adjusted earnings per share saw a substantial rise of 12.3% to $0.91, while the EBITDAC margin improved by 30 basis points to 34.9%.
Morgan Stanley (NYSE:MS) initiated coverage on Brown & Brown stock with an Overweight rating, citing promising growth prospects and industry-leading margins. The financial institution projects that the company's revenue growth will translate into earnings per share (EPS) of $4.22 in 2025 and $4.70 in 2026.
On the governance front, Brown & Brown announced the upcoming departure of board member Chilton D. Varner, who will not seek re-election at the company's 2025 Annual Meeting of Shareholders. The company stated that Varner's decision does not stem from any disagreement regarding its operations, policies, or practices.
Finally, Brown & Brown has been actively involved in mergers and acquisitions, with four completed in Q3, contributing approximately $8 million in annual revenues. The company's M&A pipeline remains robust, with interest from private equity and potential international opportunities. These are some of the recent developments shaping the trajectory of Brown & Brown.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.