Zacks Investment Research Upgrades Brown & Brown (NYSE:BRO) to “Buy”

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Zacks Investment Research upgraded shares of Brown & Brown (NYSE:BRO) from a hold rating to a buy rating in a research note published on Tuesday, September 25th. They currently have $34.00 price target on the financial services provider’s stock.

According to Zacks, “Shares of Brown & Brown have outperformed the industry year to date. Brown & Brown’s compelling portfolio with impressive growth is driven by organic and inorganic initiatives. Plus, a solid capital position drives the company well for long- term growth. A solid performance is boosting cash flow, which should help the company deploy capital in shareholder-friendly moves. However, increased financial leverage and an exposure to currency exchange rate fluctuations are headwinds. Also, heavy dependence on limited clients for commission revenues raises caution. Moreover, escalating expenses are likely to hurt margins. The company has not witnessed any earnings movement for its 2018 and 2019 estimates in the last 60 days.”

Several other brokerages also recently weighed in on BRO. Morgan Stanley upped their target price on shares of Brown & Brown from $25.00 to $26.00 and gave the company an underweight rating in a research note on Tuesday, May 29th. Royal Bank of Canada restated a hold rating and issued a $30.00 target price on shares of Brown & Brown in a research note on Wednesday, July 25th. Citigroup set a $27.00 target price on shares of Brown & Brown and gave the company a sell rating in a research note on Wednesday, September 19th. SunTrust Banks restated a buy rating and issued a $33.00 target price on shares of Brown & Brown in a research note on Tuesday, July 24th. Finally, Credit Suisse Group assumed coverage on shares of Brown & Brown in a report on Tuesday, August 7th. They issued a neutral rating and a $31.00 price target on the stock. Three research analysts have rated the stock with a sell rating, seven have issued a hold rating and three have given a buy rating to the stock. The stock presently has a consensus rating of Hold and an average price target of $29.00.

BRO traded up $0.09 during trading on Tuesday, hitting $28.48. 1,325,600 shares of the company’s stock were exchanged, compared to its average volume of 1,098,997. The company has a market cap of $8.26 billion, a P/E ratio of 29.41, a P/E/G ratio of 2.43 and a beta of 0.70. The company has a quick ratio of 0.98, a current ratio of 0.98 and a debt-to-equity ratio of 0.30. Brown & Brown has a 1 year low of $24.28 and a 1 year high of $31.55.

Brown & Brown (NYSE:BRO) last announced its earnings results on Monday, July 23rd. The financial services provider reported $0.26 earnings per share for the quarter, missing the consensus estimate of $0.28 by ($0.02). The firm had revenue of $473.10 million during the quarter, compared to analysts’ expectations of $472.74 million. Brown & Brown had a net margin of 22.25% and a return on equity of 11.75%. Brown & Brown’s revenue for the quarter was up 1.5% compared to the same quarter last year. During the same quarter last year, the company posted $0.25 earnings per share. Research analysts anticipate that Brown & Brown will post 1.22 earnings per share for the current year.

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, November 7th. Shareholders of record on Friday, October 26th will be issued a dividend of $0.08 per share. This represents a $0.32 dividend on an annualized basis and a dividend yield of 1.12%. This is a boost from Brown & Brown’s previous quarterly dividend of $0.08. The ex-dividend date is Thursday, October 25th. Brown & Brown’s dividend payout ratio is 31.25%.

Large investors have recently modified their holdings of the business. Bruderman Asset Management LLC acquired a new stake in shares of Brown & Brown during the second quarter worth $117,000. Itau Unibanco Holding S.A. acquired a new stake in shares of Brown & Brown during the second quarter worth $144,000. SevenBridge Financial Group LLC raised its holdings in shares of Brown & Brown by 100.0% during the first quarter. SevenBridge Financial Group LLC now owns 6,654 shares of the financial services provider’s stock worth $169,000 after purchasing an additional 3,327 shares during the period. Rowland & Co. Investment Counsel ADV acquired a new stake in shares of Brown & Brown during the second quarter worth $183,000. Finally, Palladium Partners LLC acquired a new stake in shares of Brown & Brown during the second quarter worth $211,000. 71.97% of the stock is currently owned by institutional investors.

About Brown & Brown

Brown & Brown, Inc markets and sells insurance products in the United States, England, Canada, Bermuda, and the Cayman Islands. Its Retail segment offers property insurance relating to physical damage to property and resultant interruption of business, or extra expense caused by fire, windstorm, or other perils; casualty insurance relating to legal liabilities, professional liability, cyber-liability, workers' compensation, and commercial and private passenger automobile coverages; fidelity and surety bonds; and life, accident, disability, health, hospitalization, medical, dental, and other ancillary insurance products, as well as risk management, loss control surveys and analysis, consultation, and claims processing services.

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