Zacks Investment Research Downgrades Brown & Brown (BRO) to Hold

Zacks Investment Research downgraded shares of Brown & Brown (NYSE:BRO) from a buy rating to a hold rating in a research report released on Wednesday.

According to Zacks, “Shares of Brown & Brown have outperformed the industry, in a year's time. Brown & Brown’s compelling portfolio with impressive growth is driven by organic and inorganic initiatives. Plus, solid capital positions the company well for the long term. A solid performance is boosting cash flow, which should help the company deploy capital in shareholder-friendly moves. However, 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. The company did not witness any revision for its 2018 estimate. It is set to release first quarter results on Apr 23. A Zacks Rank #3 combined with Earnings ESP of +4.43% makes us reasonably confident of an earnings beat.”

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Several other equities analysts also recently commented on the stock. Morgan Stanley increased their price objective on shares of Brown & Brown from $12.50 to $25.00 and gave the company an underweight rating in a research note on Tuesday, April 3rd. Barclays reissued a sell rating and issued a $23.00 price objective (down previously from $46.00) on shares of Brown & Brown in a research note on Friday, March 30th. ValuEngine downgraded shares of Brown & Brown from a buy rating to a hold rating in a research note on Thursday, March 29th. Deutsche Bank dropped their price objective on shares of Brown & Brown from $52.00 to $26.00 and set a hold rating for the company in a research note on Thursday, March 29th. Finally, Citigroup set a $24.50 price objective on shares of Brown & Brown and gave the company a sell rating in a research note on Friday, February 9th. Three investment analysts have rated the stock with a sell rating, seven have assigned a hold rating and two have assigned a buy rating to the company. The stock presently has an average rating of Hold and a consensus target price of $24.94.

Shares of NYSE:BRO opened at $25.09 on Wednesday. The company has a market capitalization of $6,914.83, a P/E ratio of 26.14, a P/E/G ratio of 2.03 and a beta of 0.69. The company has a quick ratio of 0.94, a current ratio of 0.94 and a debt-to-equity ratio of 0.33. Brown & Brown has a one year low of $20.66 and a one year high of $26.93.

Brown & Brown (NYSE:BRO) last issued its quarterly earnings data on Monday, January 22nd. The financial services provider reported $0.24 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.21 by $0.03. The business had revenue of $474.30 million during the quarter, compared to the consensus estimate of $449.89 million. Brown & Brown had a net margin of 21.24% and a return on equity of 11.19%. The firm’s revenue was up 9.4% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.21 EPS. research analysts forecast that Brown & Brown will post 1.24 earnings per share for the current fiscal year.

In other Brown & Brown news, Chairman Hyatt J. Brown sold 35,561 shares of the company’s stock in a transaction that occurred on Tuesday, March 13th. The shares were sold at an average price of $53.13, for a total value of $1,889,355.93. Following the completion of the transaction, the chairman now directly owns 27,957 shares in the company, valued at approximately $1,485,355.41. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. Also, Chairman Hyatt J. Brown sold 140,000 shares of the company’s stock in a transaction that occurred on Thursday, March 15th. The shares were sold at an average price of $52.85, for a total transaction of $7,399,000.00. Following the completion of the transaction, the chairman now owns 27,957 shares of the company’s stock, valued at $1,477,527.45. The disclosure for this sale can be found here. Corporate insiders own 17.12% of the company’s stock.

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Simplex Trading LLC acquired a new stake in shares of Brown & Brown during the fourth quarter worth $101,000. Cutler Group LP increased its position in shares of Brown & Brown by 212.2% during the fourth quarter. Cutler Group LP now owns 2,482 shares of the financial services provider’s stock worth $127,000 after buying an additional 1,687 shares during the period. Invictus RG acquired a new stake in shares of Brown & Brown during the third quarter worth $248,000. Wolverine Trading LLC acquired a new stake in shares of Brown & Brown during the third quarter worth $273,000. Finally, Zurcher Kantonalbank Zurich Cantonalbank increased its position in shares of Brown & Brown by 50.8% during the fourth quarter. Zurcher Kantonalbank Zurich Cantonalbank now owns 6,519 shares of the financial services provider’s stock worth $335,000 after buying an additional 2,197 shares during the period. Hedge funds and other institutional investors own 72.25% of the company’s stock.

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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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