Brown & Brown: Wells Fargo Downgrades to Overweight with PT to $104

Brown & Brown: Wells Fargo Downgrades to Overweight with PT to $104

Wells Fargo & Company has downgraded its rating on Brown & Brown, Inc. (NYSE: BRO) from "Buy" to "Overweight" with a new price target of $104, according to a research note dated June 12, 2025 [1]. This adjustment follows a recent quarterly dividend announcement and a mixed analyst sentiment towards the company.

Brown & Brown recently announced a quarterly dividend of $0.15 per share, representing an annual yield of 0.58% [1]. The company has also received a "Hold" recommendation from thirteen analysts, with one rating it as a sell, six as hold, and six as buy [1]. Wells Fargo's new target price is lower than the company's average twelve-month price objective of $118.92, suggesting a more cautious outlook from the brokerage.

Despite the downgrade, Wells Fargo remains optimistic about Brown & Brown's long-term prospects. The company's recent earnings report showed strong revenue growth and an increase in earnings per share, although the stock experienced a significant decline in premarket trading following the announcement [2]. Wells Fargo's new price target reflects the brokerage's belief that the company's recent earnings beat was driven by cyclical factors and may not be indicative of a sustained recovery in the insurance market.

Brown & Brown's stock has been volatile in recent months, with a 50-day moving average of $108.34 and a 200-day moving average of $111.61 [1]. The company's debt-to-equity ratio is 0.55, and its current ratio is 2.52, indicating a healthy balance sheet [1]. However, the insurance market's softening cycle and potential margin pressures could pose challenges to the company's future performance [2].

Institutional investors and hedge funds own 71.01% of Brown & Brown's stock, with several hedge funds recently adding to or reducing their stakes in the company [1]. The company's strategic acquisitions and strong operational performance have bolstered its market position, but the broader market conditions and sector-specific challenges may continue to influence its stock price.

References:
[1] https://www.marketbeat.com/instant-alerts/brown-brown-inc-nysebro-given-consensus-recommendation-of-hold-by-brokerages-2025-07-28/
[2] https://za.investing.com/news/transcripts/earnings-call-transcript-brown--brown-beats-q2-2025-forecasts-stock-drops-93CH-3808904