Brown & Brown Q2 revenue, profit miss estimates; acquisition growth fails to impress investors
BRO•Key details
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q2 Revenue | Miss | $1.70 bln | $1.72 bln (13 Analysts) |
| Q2 Adjusted EPS | Miss | $1.07 | $1.08 (17 Analysts) |
| Q2 EPS | $0.84 |
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 5 "strong buy" or "buy", 16 "hold" and 1 "sell" or "strong sell". The average consensus recommendation for the multiline insurance & brokers peer group is "hold". Wall Street's median 12-month price target for Brown & Brown Inc is $72.00, about 3.3% above its July 27 closing price of $69.70. The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 14 three months ago.
Result drivers and outlook
- Acquisitions - Revenue growth in Q2 was primarily driven by acquisitions, as organic revenue declined 0.7%
- Contingent commissions - Modest growth in organic revenue with contingents, up 0.7% in Q2
The company did not provide specific financial guidance for the current or future periods.
Quarterly results miss estimates
- U.S. insurance brokerage's Q2 revenue missed analyst expectations
- Adjusted EPS for Q2 increased 3.9% but missed analyst expectations
- Organic revenue declined 0.7%, while organic revenue with contingents rose 0.7%
