Brown & Brown (NYSE:BRO) Share Price Crosses Below 200-Day Moving Average Following Analyst Downgrade

Key Points

• Brown & Brown shares fell below their 200-day moving average, trading as low as $64.87 after Citigroup cut its price target from $79 to $76 and maintained a Neutral rating.
• The company’s third-quarter revenue of $1.70 billion and adjusted EPS of $1.07 came in slightly below analyst expectations. Organic growth was just 1.2%, pressured by softer specialty markets, acquisition-related costs and margin pressure.
• Analyst sentiment remains mixed, with a consensus Hold rating and $75.53 price target, while longer-term support includes planned $175 million in run-rate synergies by 2028 and an increased quarterly dividend of $0.18.

Brown & Brown, Inc. (NYSE:BRO - Get Free Report) passed below its 200-day moving average during trading on Wednesday after Citigroup lowered their price target on the stock from $79.00 to $76.00. The stock has a 200-day moving average of $66.96 and traded as low as $64.87. Citigroup currently has a neutral rating on the stock. Brown & Brown shares last traded at $65.7440, with a volume of 3,756,229 shares traded.

Several other equities analysts have also commented on the stock. Oppenheimer initiated coverage on shares of Brown & Brown in a research note on Wednesday, October 7th. They issued an "outperform" rating and a $73.00 price target on the stock. Wells Fargo & Company cut their price objective on shares of Brown & Brown from $69.00 to $68.00 and set an "equal weight" rating on the stock in a report on Monday, October 12th. Jefferies Financial Group restated a "hold" rating on shares of Brown & Brown in a research report on Wednesday, July 29th. Truist Financial lowered their target price on shares of Brown & Brown from $90.00 to $85.00 and set a "buy" rating for the company in a report on Wednesday. Finally, Morgan Stanley dropped their target price on shares of Brown & Brown from $60.00 to $55.00 and set an "underweight" rating on the stock in a research report on Tuesday, October 6th. One analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating, thirteen have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of "Hold" and a consensus price target of $75.53.

Brown & Brown News Roundup

Here are the key news stories impacting Brown & Brown this week:

• Positive Sentiment: Truist Securities maintained its Buy rating while lowering its price target to $85 from $90, indicating continued confidence in Brown & Brown’s longer-term prospects. Truist Securities Adjusts Price Target on Brown & Brown
• Positive Sentiment: Management outlined a goal of achieving $175 million in run-rate net EBITDAC synergies by the end of 2028, while projecting 2%–4% retail organic growth in 2027. The potential cost savings provide a longer-term earnings-support catalyst. Brown & Brown Synergy and Growth Outlook
• Neutral Sentiment: Citigroup cut its price target to $76 from $79 and retained a Neutral rating. The revised target still implies potential upside, but the change reflects a more cautious view of near-term execution. Citigroup Brown & Brown Rating
• Negative Sentiment: Third-quarter revenue was $1.70 billion versus the $1.76 billion consensus estimate, while adjusted EPS of $1.07 narrowly missed the $1.08 estimate. Revenue nevertheless increased 7.4% year over year, largely reflecting acquisition growth. Brown & Brown Q3 Revenue Miss
• Negative Sentiment: Organic growth was only 1.2% in a challenging rate environment, while softer specialty markets, accession-related costs and margin pressure weighed on results. The combination of top- and bottom-line misses explains the market’s negative reaction. BRO Q3 Earnings Miss and Margin Pressure

Hedge Funds Weigh In On Brown & Brown

A number of hedge funds have recently modified their holdings of the business. BlackRock Inc. purchased a new stake in Brown & Brown in the 2nd quarter valued at $1,418,571,000. Principal Financial Group Inc. grew its position in Brown & Brown by 1.6% during the 1st quarter. Principal Financial Group Inc. now owns 15,608,720 shares of the financial services provider's stock worth $1,017,847,000 after purchasing an additional 246,172 shares during the last quarter. Deutsche Bank AG purchased a new position in Brown & Brown during the 2nd quarter worth $266,941,000. Bank of America Corp DE grew its position in Brown & Brown by 45.2% during the 1st quarter. Bank of America Corp DE now owns 3,623,179 shares of the financial services provider's stock worth $236,268,000 after purchasing an additional 1,128,417 shares during the last quarter. Finally, Royal Bank of Canada grew its position in Brown & Brown by 5.1% during the 1st quarter. Royal Bank of Canada now owns 3,569,784 shares of the financial services provider's stock worth $232,786,000 after purchasing an additional 173,320 shares during the last quarter. 71.01% of the stock is currently owned by hedge funds and other institutional investors.

Brown & Brown Trading Down 2.7%

The company has a debt-to-equity ratio of 0.58, a current ratio of 2.11 and a quick ratio of 2.11. The company has a market capitalization of $22.00 billion, a price-to-earnings ratio of 20.81, a price-to-earnings-growth ratio of 2.27 and a beta of 0.60. The business's 50 day simple moving average is $67.15 and its 200 day simple moving average is $66.96.

Brown & Brown (NYSE:BRO - Get Free Report) last announced its earnings results on Monday, October 26th. The financial services provider reported $1.07 EPS for the quarter, missing analysts' consensus estimates of $1.08 by ($0.01). Brown & Brown had a net margin of 17.75% and a return on equity of 13.17%. The business had revenue of $1.70 billion during the quarter, compared to analysts' expectations of $1.76 billion. During the same period in the previous year, the company posted $1.05 earnings per share. Brown & Brown's quarterly revenue was up 7.4% on a year-over-year basis. Research analysts anticipate that Brown & Brown, Inc. will post 4.49 EPS for the current year.

Brown & Brown Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, November 11th. Investors of record on Wednesday, November 4th will be given a $0.18 dividend. This is a boost from Brown & Brown's previous quarterly dividend of $0.1650. The ex-dividend date is Wednesday, November 4th. This represents a $0.72 annualized dividend and a yield of 1.1%. Brown & Brown's payout ratio is presently 22.78%.

About Brown & Brown

Brown & Brown, Inc is an insurance brokerage and risk management company headquartered in Daytona Beach, Florida. The company helps businesses, public entities, individuals and other organizations identify, manage and transfer risk by arranging insurance coverage and providing related advisory services.

Its operations include retail insurance brokerage, national programs, wholesale brokerage and services. Brown & Brown offers property and casualty insurance, employee benefits, personal insurance, surety and other specialized coverage.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.