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Brown & Brown (BRO) Gains 34% in a Year: Will the Rally Last?
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Brown & Brown, Inc.’s (BRO - Free Report) shares have jumped 34% in a year compared with the industry's growth of 6%. The Finance sector and the Zacks S&P 500 composite have risen 16.4% and 22.5%, respectively, in the same time frame. With a market capitalization of $23.09 billion, the average volume of shares traded in the last three months was 1.28 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher core commissions and fees, new business, solid retention, rate increases, strategic acquisitions, strong financial position and effective capital deployment.
Earnings of Brown & Brown have grown 18.4% in the past five years, better than the industry average of 12.4%
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 4.1% and 3.7% north, respectively, in the past 60 days, reflecting analysts’ optimism on the stock.
Will the Bull Run Continue?
The Zacks Consensus Estimate for BRO’s 2024 earnings per share indicates a year-over-year increase of 26.3% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $4.54 billion, implying a year-over-year improvement of 6.7% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 8.2% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $4.88 billion, implying a year-over-year improvement of 7.5% from the consensus mark of 2024.
This Zacks Rank #2 (Buy) brokerage insurer surpassed earnings estimates in each of the last four quarters, the average being 11.19%.
The company’s revenues have been increasing over the past few years, riding on higher core commissions and fees, profit-sharing contingent commissions, guaranteed supplemental commissions and investment income. Higher core commissions and fees revenues, as well as net new and renewal business, should drive adjusted total revenue growth as well. Growth from all lines of business through a combination of improving new business, solid retention, rate increases and modest exposure unit expansion will continue to drive the momentum going forward.
The insurance broker intends to make consistent investments in boosting organic growth and margin expansion. BRO expects its diversification and solid underwriting results to help it retain its business and expand its capacity in the future.
Brown & Brown boasts an impressive inorganic story that helps strengthen its compelling products and service portfolio, expand global reach and accelerate the growth rate. Strategic buyouts also help BRO to capitalize on growing market opportunities. In 2023, the company acquired more than 43 companies with $597 million of annual revenues across its three largest divisions, expanding its footprint in North America and Europe.
Backed by a sustained operational performance, Brown & Brown has maintained a strong liquidity position. Moreover, consistent operational results have helped the insurer generate solid cash flows to be deployed in strategic initiatives as well as for shareholder-friendly moves.
The strong capital and liquidity position enables BRO to enhance shareholder value via dividend increases and share buybacks. The company has increased dividends for the last 30 years. Dividends witnessed a five-year (2019-2024) CAGR of 8.7%, making it an attractive pick for yield-seeking investors.
The Zacks Consensus Estimate for Erie Indemnity’s 2024 and 2025 earnings implies year-over-year growth of 18.2% and 12.2%, respectively, from the consensus estimate of the corresponding years.
ERIE’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average being 11.24%. Shares of ERIE have rallied 58.6% in the past year.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 and 2025 earnings implies year-over-year growth of 28.2% and 20.3%, respectively, from the consensus estimate of the corresponding years.
RYAN’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and matched in the other two, the average being 5.05%. Its shares have gained 19.7% in the past year.
Reinsurance Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 24.39%. In the past year, shares of RGA have jumped 27.5%.
The Zacks Consensus Estimate for RGA’s 2024 and 2025 earnings per share has moved up 0.4% and 0.7%, respectively, in the past seven days.
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Brown & Brown (BRO) Gains 34% in a Year: Will the Rally Last?
Brown & Brown, Inc.’s (BRO - Free Report) shares have jumped 34% in a year compared with the industry's growth of 6%. The Finance sector and the Zacks S&P 500 composite have risen 16.4% and 22.5%, respectively, in the same time frame. With a market capitalization of $23.09 billion, the average volume of shares traded in the last three months was 1.28 million.
Image Source: Zacks Investment Research
The rally was largely driven by higher core commissions and fees, new business, solid retention, rate increases, strategic acquisitions, strong financial position and effective capital deployment.
Earnings of Brown & Brown have grown 18.4% in the past five years, better than the industry average of 12.4%
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 4.1% and 3.7% north, respectively, in the past 60 days, reflecting analysts’ optimism on the stock.
Will the Bull Run Continue?
The Zacks Consensus Estimate for BRO’s 2024 earnings per share indicates a year-over-year increase of 26.3% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $4.54 billion, implying a year-over-year improvement of 6.7% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 8.2% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $4.88 billion, implying a year-over-year improvement of 7.5% from the consensus mark of 2024.
This Zacks Rank #2 (Buy) brokerage insurer surpassed earnings estimates in each of the last four quarters, the average being 11.19%.
The company’s revenues have been increasing over the past few years, riding on higher core commissions and fees, profit-sharing contingent commissions, guaranteed supplemental commissions and investment income. Higher core commissions and fees revenues, as well as net new and renewal business, should drive adjusted total revenue growth as well.
Growth from all lines of business through a combination of improving new business, solid retention, rate increases and modest exposure unit expansion will continue to drive the momentum going forward.
The insurance broker intends to make consistent investments in boosting organic growth and margin expansion. BRO expects its diversification and solid underwriting results to help it retain its business and expand its capacity in the future.
Brown & Brown boasts an impressive inorganic story that helps strengthen its compelling products and service portfolio, expand global reach and accelerate the growth rate. Strategic buyouts also help BRO to capitalize on growing market opportunities. In 2023, the company acquired more than 43 companies with $597 million of annual revenues across its three largest divisions, expanding its footprint in North America and Europe.
Backed by a sustained operational performance, Brown & Brown has maintained a strong liquidity position. Moreover, consistent operational results have helped the insurer generate solid cash flows to be deployed in strategic initiatives as well as for shareholder-friendly moves.
The strong capital and liquidity position enables BRO to enhance shareholder value via dividend increases and share buybacks. The company has increased dividends for the last 30 years. Dividends witnessed a five-year (2019-2024) CAGR of 8.7%, making it an attractive pick for yield-seeking investors.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Erie Indemnity (ERIE - Free Report) , Ryan Specialty Holdings (RYAN - Free Report) and Reinsurance Group of America, Incorporated (RGA - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Erie Indemnity’s 2024 and 2025 earnings implies year-over-year growth of 18.2% and 12.2%, respectively, from the consensus estimate of the corresponding years.
ERIE’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in one, the average being 11.24%. Shares of ERIE have rallied 58.6% in the past year.
The Zacks Consensus Estimate for Ryan Specialty’s 2024 and 2025 earnings implies year-over-year growth of 28.2% and 20.3%, respectively, from the consensus estimate of the corresponding years.
RYAN’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and matched in the other two, the average being 5.05%. Its shares have gained 19.7% in the past year.
Reinsurance Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 24.39%. In the past year, shares of RGA have jumped 27.5%.
The Zacks Consensus Estimate for RGA’s 2024 and 2025 earnings per share has moved up 0.4% and 0.7%, respectively, in the past seven days.