Zacks Investment Research Downgrades Brown & Brown, Inc. (NYSE:BRO) to Sell

Zacks Investment Research cut shares of Brown & Brown, Inc. (NYSE:BRO) from a hold rating to a sell rating in a research report released on Monday, July 31st.

According to Zacks, “Brown and Brown’s increased financial leverage and exposure to currency exchange rate fluctuations are headwinds. Also, dependence on limited clients for commission revenues raises caution. Escalating expenses are likely to hurt margins. Nonetheless, the company’s compelling portfolio with impressive growth is driven by organic and inorganic initiatives. Plus, solid capital positions it well for the long term. The insurance broker’s impressive growth is attributable to its organic and inorganic strength. A solid performance is boosting cash flow, which should help the company to deploy capital in shareholder-friendly moves. For 2017, the company envisions EBITDAC margins to be between 33% and 35%. Also, shares of Brown and Brown have underperformed the industry since the release of its second quarter results. Brown and Brown’s second-quarter 2017 earnings outpaced our expectations but remained flat year over year.”

A number of other research firms have also weighed in on BRO. BidaskClub lowered shares of Brown & Brown from a hold rating to a sell rating in a report on Tuesday, June 27th. Royal Bank Of Canada reissued a hold rating on shares of Brown & Brown in a report on Monday, May 8th. SunTrust Banks, Inc. reaffirmed a hold rating and issued a $46.00 price objective (up from $44.00) on shares of Brown & Brown in a research note on Friday, May 19th. Citigroup Inc. upped their price objective on shares of Brown & Brown from $45.00 to $46.00 and gave the company a neutral rating in a research note on Thursday, July 13th. Finally, Wells Fargo & Company reaffirmed a hold rating on shares of Brown & Brown in a research note on Monday, July 17th. Two equities research analysts have rated the stock with a sell rating, nine have assigned a hold rating and one has issued a buy rating to the company’s stock. Brown & Brown has an average rating of Hold and a consensus price target of $43.43.

Shares of Brown & Brown (NYSE BRO) opened at 43.63 on Monday. Brown & Brown has a 52 week low of $36.04 and a 52 week high of $45.77. The firm’s 50-day moving average is $43.71 and its 200 day moving average is $43.09. The company has a market capitalization of $6.10 billion, a PE ratio of 23.33 and a beta of 0.78.

Brown & Brown (NYSE:BRO) last released its quarterly earnings data on Monday, July 17th. The financial services provider reported $0.49 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $0.47 by $0.02. The business had revenue of $466.30 million during the quarter, compared to analysts’ expectations of $465.48 million. Brown & Brown had a net margin of 14.52% and a return on equity of 11.10%. The firm’s quarterly revenue was up 4.4% compared to the same quarter last year. During the same period in the prior year, the company earned $0.47 EPS. On average, analysts anticipate that Brown & Brown will post $1.84 earnings per share for the current fiscal year.

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The company also recently announced a quarterly dividend, which was paid on Wednesday, August 16th. Stockholders of record on Wednesday, August 9th were issued a $0.135 dividend. The ex-dividend date of this dividend was Monday, August 7th. This represents a $0.54 annualized dividend and a dividend yield of 1.24%. Brown & Brown’s dividend payout ratio is currently 29.03%.

In other news, EVP Anthony T. Strianese sold 18,870 shares of the stock in a transaction dated Wednesday, August 2nd. The shares were sold at an average price of $44.49, for a total value of $839,526.30. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Corporate insiders own 16.98% of the company’s stock.

Hedge funds have recently made changes to their positions in the stock. Russell Investments Group Ltd. raised its position in Brown & Brown by 12.1% in the first quarter. Russell Investments Group Ltd. now owns 79,110 shares of the financial services provider’s stock valued at $3,301,000 after buying an additional 8,531 shares during the last quarter. First Quadrant L P CA raised its position in Brown & Brown by 0.7% in the first quarter. First Quadrant L P CA now owns 27,035 shares of the financial services provider’s stock valued at $1,128,000 after buying an additional 179 shares during the last quarter. Glen Harbor Capital Management LLC raised its position in Brown & Brown by 2.3% in the first quarter. Glen Harbor Capital Management LLC now owns 3,632 shares of the financial services provider’s stock valued at $152,000 after buying an additional 80 shares during the last quarter. ProShare Advisors LLC raised its position in Brown & Brown by 16.2% in the first quarter. ProShare Advisors LLC now owns 235,101 shares of the financial services provider’s stock valued at $9,808,000 after buying an additional 32,721 shares during the last quarter. Finally, Profund Advisors LLC raised its position in Brown & Brown by 4.8% in the first quarter. Profund Advisors LLC now owns 16,962 shares of the financial services provider’s stock valued at $708,000 after buying an additional 782 shares during the last quarter. Institutional investors own 72.58% of the company’s stock.

Brown & Brown Company Profile

Brown & Brown, Inc is a diversified insurance agency, wholesale brokerage, insurance programs and service company. The Company markets and sells insurance products and services, in the property, casualty and employee benefits areas. It provides its customers with non-investment insurance contracts, as well as other customized risk management products and services.

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Analyst Recommendations for Brown & Brown (NYSE:BRO)

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