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Brown & Brown Inc.

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Shares of Brown and Brown have outperformed the industry in a year. Its compelling portfolio with impressive growth is driven by organic and inorganic initiatives. Plus, solid capital positions it well for the long term. The insurance broker’s impressive growth is attributable to its organic and inorganic strength. A solid performance is boosting cash flow, which should help the company to deploy capital in shareholder-friendly moves. For 2017, the company envisions EBITDAC margins to be between 33% and 35%. However, increased financial leverage and exposure to currency exchange rate fluctuations are headwinds. Also, dependence on limited clients for commission revenues raises caution. Escalating expenses are likely to hurt margins. Our proven does not conclusively show that the company is likely to beat on earnings this time. While a Zacks Rank #3 increases the predictive power of ESP, an Earnings ESP of -0.51% makes prediction difficult.

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