BRO Quotes: Valuation Gap Presents Opportunity at 16.72X Forward Multiple

Brown & Brown, Inc. (BRO) is currently priced below sector benchmarks, with its forward price-to-earnings ratio of 16.72X trailing the Brokerage Insurance industry average of 17.49X, the Finance sector’s 17.07X, and the broader S&P 500 Composite’s 23.46X. The company commands a $26.77 billion market valuation with average quarterly trading volume reaching 2.8 million shares. Comparable brokers including Marsh & McLennan Companies, Inc. (MMC) and Arthur J. Gallagher & Co. (AJG) command premium valuations relative to sector norms, whereas Willis Towers Watson Public Limited Company (WTW) similarly trades at a reduced multiple.

Performance context reveals BRO shares have declined 23.8% over the past twelve months, outperforming the industry’s 27.4% retreat. This relative resilience positions the stock favorably against sector peers during a challenging period.

Earnings Momentum and Revenue Expansion Trajectory

The consensus earnings outlook for BRO suggests 2025 earnings per share will increase 11.4% year-over-year, while revenue expectations target $5.93 billion, representing 23.4% growth. Forward projections indicate 2026 earnings per share climbing 10.2% with revenues expanding 23.5% relative to 2025 levels. The company’s five-year earnings compound annual growth rate of 21.5% meaningfully exceeds the industry benchmark of 15.2%.

BRO’s track record of earnings surprises underscores operational precision. The firm exceeded consensus estimates in three consecutive quarters with one miss, posting an average upside surprise of 8.65%.

Analyst Price Targets Signal Substantial Appreciation Potential

Fourteen investment analysts tracking BRO have established a consensus price target of $97.43 per share, implying 25.4% upside from recent closing levels. This bullish consensus reflects confidence in the company’s growth trajectory and market position.

Revenue Drivers and Strategic Expansion Framework

Commission and fee revenue—the dominant income component—benefits from expanding new client acquisitions, elevated client retention rates, and consistent pricing power across coverage lines. BRO achieved its intermediate revenue milestone of $4 billion, effectively doubling its top line over five years. The company systematically invests in organic acceleration and margin enhancement initiatives, maintaining an industry-leading adjusted EBITDAC margin profile.

Acquisitions represent a core growth accelerator. BRO has completed 713 insurance intermediary acquisitions since 1993 through Q3 2025, with the Quintes transaction marking the largest 2024 deal. This acquisition cadence expands service capabilities, geographic footprint, and revenue scale.

Operating leverage and disciplined capital allocation characterize BRO’s financial model. The company maintains robust liquidity metrics with improving leverage profiles. Cash generation strength enables systematic deployment across acquisitions, capital investment, and shareholder distributions. The dividend program reflects this commitment: BRO has increased shareholder payouts annually for 30 consecutive years, with five-year dividend CAGR of 8.7%.

Headwinds and Profitability Considerations

International ventures spanning the United Kingdom, Bermuda, and Cayman Islands introduce operational complexity and regulatory variability. Currency exposure, shifting economic landscapes, and intensifying competitive pressures threaten margin stability and execution efficiency.

Profitability metrics warrant scrutiny. BRO’s return on equity of 13.6% materially lags the sector average of 23.6%. Return on invested capital measures 8.1% versus the industry’s 8.9%. Trailing twelve-month ROIC of 6.7% similarly underperforms the industry standard of 8.4%, suggesting suboptimal capital deployment effectiveness relative to peers.

Investment Perspective

BRO’s combination of valuation attractiveness, robust earnings momentum, consistent revenue expansion, strategic acquisition execution, and exceptional dividend longevity creates a compelling framework for consideration. Favorable consensus earnings revisions and analyst sentiment reinforce the positive case. The company’s substantial capital capacity provides strategic flexibility.

Counterbalancing these strengths are international expansion complexities, regulatory uncertainties, and below-sector profitability efficiency. These factors may temporarily constrain near-term performance momentum.

Balancing these competing dynamics, a measured approach remains prudent for this Zacks Rank #3 (Hold) rated security.