Brown & Brown Set for Optimistic Growth Amid Market Underestimation

Michael Zaremski from BMO Capital maintains a Buy rating on Brown & Brown with a $122 price target. He believes the company's current market position offers growth opportunities due to market underestimation, despite high short interest. Zaremski expects insurance inflation in small to mid-sized brokerage to outpace larger accounts, leading to faster organic growth. He also sees potential for increased M&A revenue.

Brown & Brown, Inc. (NYSE: BRO) has been the focus of both institutional investors and analysts, with varying opinions on the company's prospects. A recent SEC filing by TimesSquare Capital Management LLC revealed a reduction in its holdings in Brown & Brown, while other institutional investors have increased their stakes. Analysts also offer differing views on the stock's potential.

Institutional Investor Activity

In the first quarter of 2025, TimesSquare Capital Management LLC cut its holdings in Brown & Brown by 8.4%, selling 32,910 shares to reduce its position to 358,962 shares [1]. This move was followed by significant increases in holdings by other institutional investors. Capital Investment Advisors LLC acquired a new position valued at approximately $1,929,000, and Fifth Third Bancorp lifted its stake by 7.1%, now owning 6,807 shares valued at $847,000 [1]. Arrowstreet Capital Limited Partnership increased its holdings by 395.6% in the fourth quarter, owning 34,197 shares valued at $3,489,000 [1]. Tandem Investment Advisors Inc. and National Bank of Canada FI also increased their stakes, highlighting the varied interest among institutional investors [1].

Analyst Ratings and Price Targets

Several analysts have issued ratings and price targets for Brown & Brown. Morgan Stanley maintained an "equal weight" rating with a $128.00 price target, while Jefferies Financial Group increased its target price to $109.00 with a "hold" rating [1]. Truist Financial lowered its target price to $130.00 with a "buy" rating, and Goldman Sachs Group downgraded the stock to "neutral" with a $119.00 price target [1]. Keefe, Bruyette & Woods upped its target price to $104.00 with an "underperform" rating [1]. The consensus rating is "Hold" with a consensus price target of $118.23 [2].

Michael Zaremski from BMO Capital maintains a "Buy" rating on Brown & Brown with a $122 price target, citing growth opportunities due to market underestimation and high short interest [3]. He expects insurance inflation in small to mid-sized brokerage to outpace larger accounts, leading to faster organic growth, and sees potential for increased M&A revenue.

Financial Performance

Brown & Brown reported $1.29 earnings per share (EPS) for the quarter, missing analysts' consensus estimates by $0.01. The company's revenue for the quarter was $1.40 billion, up 11.6% compared to the same quarter last year [1]. The stock has a market capitalization of $30.60 billion, a P/E ratio of 29.73, and a beta of 0.82 [1].

Conclusion

Brown & Brown, Inc. continues to attract interest from institutional investors and analysts, with varying opinions on its growth prospects. The company's recent earnings and revenue growth indicate a positive trend, but the stock's performance is subject to market conditions and analyst forecasts. Investors should carefully consider the company's fundamentals and the diverse views of analysts before making investment decisions.

References

[1] https://www.marketbeat.com/instant-alerts/filing-timessquare-capital-management-llc-has-4466-million-holdings-in-brown-brown-inc-nysebro-2025-07-14/
[2] https://www.marketbeat.com/stocks/NYSE/BRO/forecast/
[3] BMO Capital Research Report on Brown & Brown, Inc.