William Blair analyst Adam Klauber has maintained their neutral stance on BRO stock, giving a Hold rating today.
Adam Klauber has given his Hold rating due to a combination of factors affecting Brown & Brown’s financial outlook. The company’s first-quarter cash EPS showed a modest increase of 13% year-over-year, yet it fell slightly short of expectations due to a higher tax rate. While the organic growth rate of 6.5% met the firm’s estimates, it was marginally below the broader market consensus.
Furthermore, despite an improvement in the adjusted EBITDAC margin, challenges such as property rate headwinds and difficult comparisons in the programs segment are anticipated to slow organic growth through 2025. Klauber adjusted the organic growth and cash EPS estimates downward, highlighting the need for strategic deals to sustain earnings growth. Given that Brown & Brown’s shares are trading at a premium compared to peers, Klauber suggests there might be more attractive investment opportunities elsewhere, thus maintaining a Hold rating.
In another report released today, Barclays also maintained a Hold rating on the stock with a $121.00 price target.