There is no way Brown & Brown Inc. (BRO) can keep these numbers up

Brown & Brown Inc. (NYSE: BRO) stock fell -3.82% on Tuesday to $63.20 against a previous-day closing price of $65.71. With 1.23 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.28 million shares. During the session, the Insurance Brokers company that operates in wider Financial sector, reached to the highest price of $65.61 whereas the lowest price it dropped to was $63.09. The 52-week range on BRO shows that it touched its highest point at $68.43 and its lowest point at $52.82 during that stretch. It currently has a 1-year price target of $68.70. With its current market cap of 17.90 billion, BRO has annualized dividend of $0.46 while the current yield stands at 0.73%. Beta for the stock currently stands at 0.75.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of BRO was down-trending over the past week, with a drop of -3.82%, but this was up by 3.50% over a month. Three-month performance surged to 11.90% while six-month performance rose 10.99%. The stock gained 14.91% in the past year, while it has gained 10.94% so far this year. A look at the trailing 12-month EPS for BRO yields 2.42 with Next year EPS estimates of 2.78. For the next quarter, that number is 0.59. This implies an EPS growth rate of 14.30% for this year and 9.76% for next year. EPS is expected to grow by 13.22% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 19.70%.

Float and Shares Shorts:

At present, 278.60 million BRO shares are outstanding with a float of 235.82 million shares on hand for trading. On Apr 27, 2023, short shares totaled 3.01 million, which was 1.06% higher than short shares on Mar 30, 2023. In addition to Mr. J. Powell Brown C.P.C.U., CPCU as the firm’s CEO, Pres & Director, Mr. R. Andrew Watts serves as its Exec. VP, CFO & Treasurer.

Institutional Ownership:

Through their ownership of 74.79% of BRO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 43.21% of BRO, in contrast to 30.74% held by mutual funds. Shares owned by individuals account for 19.56%. As the largest shareholder in BRO with 9.43% of the stake, The Vanguard Group, Inc. holds 26,809,710 shares worth 26,809,710. A second-largest stockholder of BRO, Select Equity Group LP, holds 17,261,734 shares, controlling over 6.07% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in BRO, holding 12,052,117 shares or 4.24% stake. With a 2.89% stake in BRO, the Principal Funds, Inc. – Mid Cap F is the largest stakeholder. A total of 8,214,701 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.47% of BRO stock, is the second-largest Mutual Fund holder. It holds 7,014,234 shares valued at 451.65 million. Vanguard 500 Index Fund holds 1.93% of the stake in BRO, owning 5,487,630 shares worth 353.35 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, BRO reported revenue of $839.70M and operating income of $231.10M. The EBITDA in the recently reported quarter was $273.70M and diluted EPS was $0.51.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for BRO since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With BRO analysts setting a high price target of $73.00 and a low target of $62.00, the average target price over the next 12 months is $69.20. Based on these targets, BRO could surge 15.51% to reach the target high and fall by -1.9% to reach the target low. Reaching the average price target will result in a growth of 9.49% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded BRO stock several times over the past three months with 10 Buys and 13 Sells. In these transactions, 21,632 shares were bought while 116,108 shares were sold. The number of buy transactions has increased to 35 while that of sell transactions has risen to 24 over the past year. The total number of shares bought during that period was 248,781 while 371,527 shares were sold.

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