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BRO Stock Declines 27.1% in a Year: What Should Investors Do Now?
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Key Takeaways
Brown & Brown's commissions and fees rose 32.4% to $1.65 billion in Q2 2026.
BRO completed six small acquisitions, while Accession contributed about $410 million to revenues.
Operating cash flow rose 13% to about $610 million, while interest expense surged 96.1% to $100 million.
Shares of Brown & Brown, Inc. (BRO - Free Report) have plunged 27.1% in the past year compared with the industry’s 15.3% decline.
Soft organic growth, moderating property rates, elevated costs and acquisition-related debt are weighing on the stock. Despite these factors, the company's strong client retention, new business generation and acquisitions remain intact, while recovery depends on improving earnings growth, stronger insurance market conditions and margin stabilization.
Shares of other insurance brokers like Aon plc (AON - Free Report) , Arthur J. Gallagher & Co. (AJG - Free Report) and Willis Towers Watson Public Limited Company (WTW - Free Report) have declined 14.9%, 15.2% and 3.1%, respectively, over the past year.
1-Year Price Performance - BRO, AON, AJG, WTW & Industry
Image Source: Zacks Investment Research
BRO’s Valuation
Shares of Brown & Brown are trading at a discount compared with the industry. Its forward 12-month price-to-earnings multiple of 14.12X is lower than the industry average of 15.59X.
Image Source: Zacks Investment Research
Shares of other insurance brokers like AON, AJG and WTW are also trading at a discount.
BRO’s Average Target Price Suggests Upside
Based on short-term price targets offered by 16 analysts, the Zacks average price target is $76.69 per share. The average suggests a potential 12.2% upside from the last closing price.
Image Source: Zacks Investment Research
BRO’s Growth Projection
The Zacks Consensus Estimate for Brown & Brown’s 2026 earnings per share (EPS) indicates a year-over-year increase of 5.6%. The consensus estimate for revenues is pegged at $7.04 billion, implying a year-over-year improvement of 19.2%.
The consensus estimate for 2027 EPS and revenues indicates increases of 8.1% and 5.3%, respectively, from the corresponding 2026 estimates.
Earnings have grown 19.2% in the past five years, better than the industry average of 13.9%. The expected long-term earnings growth rate is 72%.
Factors That Benefit BRO
Commissions and fees, the main component of the top line, benefit from new business, strong retention and sales momentum, supporting recurring revenues and earnings visibility. Commissions and fees increased 32.4% year over year to $1.65 billion in the second quarter of 2026. Strong contingent commissions also supported earnings, increasing $40 million in the second quarter of 2026, including a $24 million contribution from the Accession acquisition.
Brown & Brown’s strategic acquisitions strengthen its product portfolio, expand its reach and support revenue growth. The company completed six small agency acquisitions in the second quarter, while Accession contributed approximately $410 million to revenues. BRO expects $30-$40 million in synergies from Accession in 2026. These initiatives should support earnings as the acquired operations become more closely aligned with Brown & Brown’s broader platform.
Its diversified Retail and Specialty Distribution businesses provide exposure to multiple insurance markets. Management expects organic growth to improve in the second half of 2026, with Retail growth excluding contingents at 1.5-2.5% and Specialty Distribution growth at 2-4%. Favorable casualty pricing and demand for risk-management and employee-benefits services should support growth.
Artificial intelligence and technology investments could provide an additional long-term catalyst. Partnerships with Anthropic, McKinsey and Accenture are expected to accelerate AI adoption across sales, placement, underwriting and support functions.
BRO is also benefiting from strong cash generation and shareholder-friendly capital allocation. Operating cash flow reached approximately $610 million in the first half of 2026, up 13% year over year. The company repurchased approximately $500 million of stock during the first six months. It also helps to hire revenue-producing employees, integration initiatives, technology development, debt reduction and selective acquisitions, supporting the company’s long-term operating capacity.
BRO's Headwinds
Brown & Brown has been experiencing rising expenses due to higher employee compensation and benefits, amortization, other operating expenses and interest expense. These factors are creating pressure on margins despite revenue growth.
As of June 30, 2026, long-term debt rose 1.2% to $7.76 billion, while interest expense surged 96.1% to $100 million, weighing on financial flexibility.
BRO's expanding international operations expose it to foreign currency, regulatory and economic risks across global markets.
Conclusion
BRO’s commission growth, new business, strong retention, strategic acquisitions, diversified brokerage platform and balanced capital deployment position the company well for growth. Its strong cash flow, AI and technology investments, favorable estimates and cheap valuation are other positives. However, international expansion risks, rising expenses and high debt levels are the headwinds.
View the Zacks #1 Rank List
Image: Bigstock
BRO Stock Declines 27.1% in a Year: What Should Investors Do Now?
Key Takeaways
Shares of Brown & Brown, Inc. (BRO - Free Report) have plunged 27.1% in the past year compared with the industry’s 15.3% decline.
Soft organic growth, moderating property rates, elevated costs and acquisition-related debt are weighing on the stock. Despite these factors, the company's strong client retention, new business generation and acquisitions remain intact, while recovery depends on improving earnings growth, stronger insurance market conditions and margin stabilization.
Shares of other insurance brokers like Aon plc (AON - Free Report) , Arthur J. Gallagher & Co. (AJG - Free Report) and Willis Towers Watson Public Limited Company (WTW - Free Report) have declined 14.9%, 15.2% and 3.1%, respectively, over the past year.
1-Year Price Performance - BRO, AON, AJG, WTW & Industry
Image Source: Zacks Investment Research
BRO’s Valuation
Shares of Brown & Brown are trading at a discount compared with the industry. Its forward 12-month price-to-earnings multiple of 14.12X is lower than the industry average of 15.59X.
Image Source: Zacks Investment Research
Shares of other insurance brokers like AON, AJG and WTW are also trading at a discount.
BRO’s Average Target Price Suggests Upside
Based on short-term price targets offered by 16 analysts, the Zacks average price target is $76.69 per share. The average suggests a potential 12.2% upside from the last closing price.
Image Source: Zacks Investment Research
BRO’s Growth Projection
The Zacks Consensus Estimate for Brown & Brown’s 2026 earnings per share (EPS) indicates a year-over-year increase of 5.6%. The consensus estimate for revenues is pegged at $7.04 billion, implying a year-over-year improvement of 19.2%.
The consensus estimate for 2027 EPS and revenues indicates increases of 8.1% and 5.3%, respectively, from the corresponding 2026 estimates.
Earnings have grown 19.2% in the past five years, better than the industry average of 13.9%. The expected long-term earnings growth rate is 72%.
Factors That Benefit BRO
Commissions and fees, the main component of the top line, benefit from new business, strong retention and sales momentum, supporting recurring revenues and earnings visibility. Commissions and fees increased 32.4% year over year to $1.65 billion in the second quarter of 2026. Strong contingent commissions also supported earnings, increasing $40 million in the second quarter of 2026, including a $24 million contribution from the Accession acquisition.
Brown & Brown’s strategic acquisitions strengthen its product portfolio, expand its reach and support revenue growth. The company completed six small agency acquisitions in the second quarter, while Accession contributed approximately $410 million to revenues. BRO expects $30-$40 million in synergies from Accession in 2026. These initiatives should support earnings as the acquired operations become more closely aligned with Brown & Brown’s broader platform.
Its diversified Retail and Specialty Distribution businesses provide exposure to multiple insurance markets. Management expects organic growth to improve in the second half of 2026, with Retail growth excluding contingents at 1.5-2.5% and Specialty Distribution growth at 2-4%. Favorable casualty pricing and demand for risk-management and employee-benefits services should support growth.
Artificial intelligence and technology investments could provide an additional long-term catalyst. Partnerships with Anthropic, McKinsey and Accenture are expected to accelerate AI adoption across sales, placement, underwriting and support functions.
BRO is also benefiting from strong cash generation and shareholder-friendly capital allocation. Operating cash flow reached approximately $610 million in the first half of 2026, up 13% year over year. The company repurchased approximately $500 million of stock during the first six months. It also helps to hire revenue-producing employees, integration initiatives, technology development, debt reduction and selective acquisitions, supporting the company’s long-term operating capacity.
BRO's Headwinds
Brown & Brown has been experiencing rising expenses due to higher employee compensation and benefits, amortization, other operating expenses and interest expense. These factors are creating pressure on margins despite revenue growth.
As of June 30, 2026, long-term debt rose 1.2% to $7.76 billion, while interest expense surged 96.1% to $100 million, weighing on financial flexibility.
BRO's expanding international operations expose it to foreign currency, regulatory and economic risks across global markets.
Conclusion
BRO’s commission growth, new business, strong retention, strategic acquisitions, diversified brokerage platform and balanced capital deployment position the company well for growth. Its strong cash flow, AI and technology investments, favorable estimates and cheap valuation are other positives. However, international expansion risks, rising expenses and high debt levels are the headwinds.
Therefore, it is wise to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.