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Brown & Brown (BRO) Up 5.3% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Brown & Brown (BRO - Free Report) . Shares have added about 5.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Brown & Brown Q2 Earnings & Revenues Beat Estimates
Brown & Brown, Inc. second-quarter 2021 adjusted earnings of 49 cents per share beat the Zacks Consensus Estimate by 22.5%. The bottom line also improved 44.1% year over year. Higher commissions and fees drove the company’s results, partly offset by increased expenses.
Q2 in Details
Total revenues of $727 million outpaced both the Zacks Consensus Estimate by 5.7%. Moreover, the top line improved 21.4% year over year. The upside can primarily be attributed to improved commission and fees, and high organic growth.
Commissions and fees grew 21.3% year over year to $725.9 million. Organic revenues increased 14.7% to $658.4 million in the quarter under review. Investment income plunged 33.3% year over year to $0.2 million.
EBITDAC was $239.3 million, up 35.4% year over year. EBITDAC margin expanded 340 basis points (bps) year over year to 32.9%.
Total expenses increased 15.2% to $541 million, courtesy of a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest.
Financial Update
Brown & Brown exited second-quarter 2021 with cash and cash equivalents of $850.2 million, up 4% from 2020-end level.
Long-term debt of $1.7 billion as of Jun 30, 2021 was down 13% from 2020 end. Net cash provided by operating activities in the first half of 2021 was $466.3 million, up 11.9% year over year.
Dividend Update
On Jul 21, Brown & Brown declared cash dividend of 9.25 cents per share. The dividend will be paid on Aug 18, 2021 to shareholders of record as of Aug 11.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Brown & Brown has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brown & Brown has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Brown & Brown (BRO) Up 5.3% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Brown & Brown (BRO - Free Report) . Shares have added about 5.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Brown & Brown Q2 Earnings & Revenues Beat Estimates
Brown & Brown, Inc. second-quarter 2021 adjusted earnings of 49 cents per share beat the Zacks Consensus Estimate by 22.5%. The bottom line also improved 44.1% year over year. Higher commissions and fees drove the company’s results, partly offset by increased expenses.
Q2 in Details
Total revenues of $727 million outpaced both the Zacks Consensus Estimate by 5.7%. Moreover, the top line improved 21.4% year over year. The upside can primarily be attributed to improved commission and fees, and high organic growth.
Commissions and fees grew 21.3% year over year to $725.9 million. Organic revenues increased 14.7% to $658.4 million in the quarter under review. Investment income plunged 33.3% year over year to $0.2 million.
EBITDAC was $239.3 million, up 35.4% year over year. EBITDAC margin expanded 340 basis points (bps) year over year to 32.9%.
Total expenses increased 15.2% to $541 million, courtesy of a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest.
Financial Update
Brown & Brown exited second-quarter 2021 with cash and cash equivalents of $850.2 million, up 4% from 2020-end level.
Long-term debt of $1.7 billion as of Jun 30, 2021 was down 13% from 2020 end. Net cash provided by operating activities in the first half of 2021 was $466.3 million, up 11.9% year over year.
Dividend Update
On Jul 21, Brown & Brown declared cash dividend of 9.25 cents per share. The dividend will be paid on Aug 18, 2021 to shareholders of record as of Aug 11.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
Currently, Brown & Brown has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brown & Brown has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.