On Tuesday, Truist Securities increased the price target for shares of insurance brokerage firm Brown & Brown (NYSE:BRO) to $112.00, up from the prior target of $104.00, while maintaining a Buy rating on the stock. The adjustment follows a favorable second-quarter performance that aligned with positive trends observed in the Excess & Surplus (E&S) market and recent rate surveys.
The firm's analyst cited a robust second-quarter outcome that echoed encouraging signs from the E&S market, as well as rate surveys. The impact of property-related headwinds was less severe than anticipated, contributing to the optimistic outlook.
Based on these results, the analyst has revised the full-year 2024 earnings per share (EPS) estimate upwards to $3.66 from the previous $3.55 and has also increased the 2025 forecast to $3.95 from $3.85 per share.
Brown & Brown is anticipated to experience healthy organic growth driven by a combination of factors including robust new business acquisition, more resilient casualty pricing, and comparatively easier year-over-year comparisons in property following the second quarter. These elements are expected to support the company's growth trajectory.
The new stock price target of $112 is based on a multiple of 18.8 times the projected earnings before interest, taxes, depreciation, and amortization (EBITDA) for the upcoming year. This valuation places Brown & Brown just below the large-cap group leader Gallagher, which is currently rated as Hold. The positive outlook for Brown & Brown reflects confidence in the company's continued performance and market position.
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