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BofA lifts Brown & Brown stock PT to $101 from $91, reflecting higher EPS forecast

Published 2024-05-22, 11:28 a/m
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On Wednesday, BofA Securities revised its stance on Brown & Brown (NYSE:BRO), upgrading the insurance company's stock from Underperform to Neutral. The firm also increased the price target to $101.00, up from the previous $91.00.

The adjustment follows several weeks during which the firm's earnings per share (EPS) forecasts for Brown & Brown have been on an upward trajectory. This change is attributed to the company's first-quarter revenue surpassing expectations and a positive outlook on the persistency of investment income and contingent commissions.

The analyst from BofA Securities noted that Brown & Brown's stock is currently trading near 135% of the S&P 500's price-to-earnings (P/E) ratio, which is consistent with its five-year average. This valuation is considered to reflect a fair balance between the company's current above-average organic growth and investment income, as well as the potential for a gradual return to historical growth rates over time.

Investors and market watchers may consider this rating change and price target adjustment as an indicator of Brown & Brown's current financial health and prospects within the insurance industry. The company's alignment with the S&P 500's P/E ratio and the analyst's comments suggest a balanced view of the stock's valuation at this time.

InvestingPro Insights

As BofA Securities adjusts its outlook on Brown & Brown, real-time data from InvestingPro provides additional context for investors considering the company's stock. Brown & Brown is currently trading at a P/E ratio of 27.62, which is noteworthy given the company's history of raising its dividend for 31 consecutive years, signaling a strong track record of financial stability and shareholder commitment. This is further bolstered by the company's performance over the last twelve months, with a notable revenue growth of nearly 15% and a gross profit margin of 48.18%, reflecting the company's efficiency and profitability.

InvestingPro Tips highlight that Brown & Brown is trading at a low P/E ratio relative to near-term earnings growth and has maintained dividend payments for an impressive 39 consecutive years. These factors, combined with a high return over the last decade, provide a compelling case for the company's consistent performance and potential as a long-term investment. Moreover, the stock is trading near its 52-week high, which aligns with BofA Securities' upgraded price target and suggests that the market is responding positively to the company's financial health.

For investors looking for more in-depth analysis, InvestingPro offers additional tips on Brown & Brown. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to a wealth of information that can inform your investment decisions. There are 7 more InvestingPro Tips available for Brown & Brown, which could provide further insights into the company's stock performance and valuation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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