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BMO Capital raised its price target on Brown & Brown (NYSE:BRO) to $122.00 from $116.00 on Wednesday, while maintaining an Outperform rating on the insurance brokerage firm’s stock.
The price target increase follows Brown & Brown’s acquisition of Accession Risk, which BMO Capital believes adds valuable diversification to the company’s business portfolio. This diversification may become increasingly important if commercial property pricing trends continue to weaken, particularly in Florida where Brown & Brown has significant exposure.
BMO Capital noted that while revenue synergies in this acquisition appear less definitive compared to competitor Arthur J. Gallagher’s recently announced AP deal, the firm still considers Brown & Brown’s guidance to be conservative.
The analyst firm highlighted that expense synergies and cash flow accretion from the Accession Risk acquisition will support Brown & Brown’s merger and acquisition strategy, potentially driving further business growth and compounding returns.
BMO Capital concluded that Brown & Brown’s current stock price level remains attractive given these factors, supporting its decision to maintain an Outperform rating while raising the price target.
In other recent news, Brown & Brown, Inc. has announced a public offering of 39,215,686 shares of common stock at $102.00 per share, aiming to raise $4 billion to fund its acquisition of RSC Topco, Inc. The company expects to net approximately $3.9 billion after expenses, with J.P. Morgan and BofA Securities leading the offering. This acquisition, valued at $9.825 billion, will see Brown & Brown integrate Accession Risk Management Group, enhancing its insurance distribution channels and expanding its specialty solutions. The transaction is expected to close in the third quarter of 2025, pending customary approvals. Additionally, Goldman Sachs has downgraded Brown & Brown’s stock from Buy to Neutral, citing an anticipated alignment of the company’s growth with industry peers. The price target has been adjusted to $119, reflecting a 6% decrease. Furthermore, Brown & Brown’s subsidiary, Bridge Specialty Group, has acquired the assets of Mississippi-based Tim Parkman, Inc., enhancing its service offerings and distribution network. The financial terms of this acquisition were not disclosed.
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