Brown & Brown Q4 Earnings Beat Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 26 2026
0mins
Should l Buy BRO?
Source: seekingalpha
- Earnings Beat: Brown & Brown reported a Q4 GAAP EPS of $0.93, exceeding expectations by $0.29, indicating strong profitability performance.
- Significant Revenue Growth: Revenue reached $1.6 billion, a 35.6% year-over-year increase, although it missed expectations by $50 million, reflecting increased market competition pressures.
- Taxable Income Growth: Income before income taxes was $321 million, up 16.7%, with a margin of 20.0%, down from 23.2% in the prior year, indicating challenges in cost control.
- Net Income Increase: The net income attributable to the company was $264 million, an increase of $54 million or 25.7%, demonstrating ongoing improvements in profitability.
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Analyst Views on BRO
Wall Street analysts forecast BRO stock price to rise
12 Analyst Rating
2 Buy
9 Hold
1 Sell
Hold
Current: 69.530
Low
80.00
Averages
91.45
High
114.00
Current: 69.530
Low
80.00
Averages
91.45
High
114.00
About BRO
Brown & Brown, Inc. is an insurance brokerage company engaged in delivering risk management solutions. It markets and sells insurance products and services, primarily in the property, casualty and employee benefits areas. Its segments include the Retail segment provides a range of insurance products and services to commercial, public and quasi-public, professional and individual insured customers, and non-insurance services and products through its automobile dealer services F&I businesses; The Programs segment specializes in the development, underwriting and management of insurance program business, often designed for niche, underserved markets, and distributes these coverages to retail agencies, as well as affinity groups, wholesale entities and sold direct to consumers; and The Wholesale Brokerage segment markets and sells excess and surplus commercial and personal lines insurance, primarily through independent agents and brokers, as well as Brown & Brown retail agents.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Authorization Background: This repurchase initiative is based on the board's approval of a $1.5 billion share repurchase authorization announced on October 22, 2025, reflecting the company's confidence in future growth and commitment to shareholder returns.
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- Increased Competition in Commercial Insurance: The report highlights that heightened competition among insurers creates new opportunities for companies with strong risk management practices, although large loss events such as wildfires and cyber incidents remain persistent challenges.
- Digital Transformation in Employee Benefits: Companies are increasingly focusing on deploying digital health tools to control costs while ensuring the quality and relevance of benefits, making it essential to attract and retain talented individuals in a competitive labor market.
- Pressure in Personal Insurance Market: Climate volatility and regulatory changes necessitate stronger preparation and clearer documentation, and while capacity is expanding in some areas, regions exposed to natural disasters continue to face tighter requirements and sustained pricing pressure.
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Introduction of ChatGPT App: The app aims to streamline the insurance buying process for homeowners, potentially disrupting traditional insurance brokerage practices.
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- Employee Attrition Impact: Company leadership disclosed that 275 former employees joined a competitor, taking with them customers representing $23 million in annual revenue, posing a significant threat to the company's market share and revenue stability.
- Stock Price Reaction: On January 27, 2026, Brown & Brown's stock price fell by $5.50, or 6.91%, closing at $74.12 per share, reflecting market concerns regarding the company's future outlook and operational challenges.
- Legal Investigation Initiated: Pomerantz LLP is investigating Brown & Brown and its executives for potential securities fraud or other unlawful business practices, which could further impact the company's reputation and shareholder confidence.
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- Valuation Analysis: Zaremski noted that while P/E ratios are at discounted levels, the enterprise value to EBITDA and free cash flow yield remain expensive compared to the S&P 500, suggesting limited attractiveness for the stock.
- Earnings Forecast Adjustment: BMO Capital reduced its EBITDA estimates for Brown & Brown by approximately 3% and projected a 2.4% organic growth in 2026, reflecting a cautious stance on the company's future growth prospects.
- Lack of Positive Catalysts: Analysts believe there are no positive catalysts to drive the stock price higher in the near term, hence the Hold rating and reduced price target, indicating a pessimistic outlook for the stock's short-term performance.
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Insurance Brokerage Stocks Decline: Insurance brokerage stocks experienced a decline on Thursday, reflecting a broader trend in the stock market.
Impact of AI on the Sector: The drop in stock prices is attributed to investors' concerns about potential disruptions caused by emerging AI applications, referred to as superagents.
See More
Brown & Brown Launches $250M Accelerated Share Repurchase Program
- Share Repurchase Program: Brown & Brown has entered into an accelerated share repurchase agreement with Bank of America for $250 million, which is part of the company's $1.5 billion share repurchase authorization aimed at enhancing shareholder value and boosting market confidence.
- Authorization Background: This repurchase initiative is based on the board's approval of a $1.5 billion share repurchase authorization announced on October 22, 2025, reflecting the company's confidence in future growth and commitment to shareholder returns.
- Financial Target Increase: Brown & Brown aims to raise its margin target to 32%-37% in 2026, with projected synergies of $30 million to $40 million through Accession integration, further strengthening the company's profitability.
- Market Reaction: Despite facing a downgrade to Neutral from Citi, Brown & Brown demonstrates a proactive response to market challenges through its repurchase program and margin enhancement strategy, aiming to restore investor confidence and drive stock price appreciation.
See More
Brown & Brown Releases 2026 Market Trends Report Highlighting Buyer Advantages
- Market Dynamics Analysis: The 2026 Market Trends report from Brown & Brown reveals that insurance market conditions are shifting in favor of buyers who are well-prepared and have a positive claims history, emphasizing the importance of thorough preparation in the renewal process.
- Increased Competition in Commercial Insurance: The report highlights that heightened competition among insurers creates new opportunities for companies with strong risk management practices, although large loss events such as wildfires and cyber incidents remain persistent challenges.
- Digital Transformation in Employee Benefits: Companies are increasingly focusing on deploying digital health tools to control costs while ensuring the quality and relevance of benefits, making it essential to attract and retain talented individuals in a competitive labor market.
- Pressure in Personal Insurance Market: Climate volatility and regulatory changes necessitate stronger preparation and clearer documentation, and while capacity is expanding in some areas, regions exposed to natural disasters continue to face tighter requirements and sustained pricing pressure.
See More
Recent Decline in AI Stocks: Insurance Brokers
Insurance Broker Shares Decline: Shares of major insurance brokers fell this week following the announcement of a new ChatGPT-based app designed to assist homeowners in selecting and purchasing insurance.
Introduction of ChatGPT App: The app aims to streamline the insurance buying process for homeowners, potentially disrupting traditional insurance brokerage practices.
See More
Brown & Brown Under Investigation, Stock Plummets
- Financial Performance Decline: Brown & Brown reported a 2.8% decrease in organic revenue for Q4 2025, primarily due to a drop in flood claims processing revenue, which directly impacts the company's financial health and investor confidence.
- Employee Attrition Impact: Company leadership disclosed that 275 former employees joined a competitor, taking with them customers representing $23 million in annual revenue, posing a significant threat to the company's market share and revenue stability.
- Stock Price Reaction: On January 27, 2026, Brown & Brown's stock price fell by $5.50, or 6.91%, closing at $74.12 per share, reflecting market concerns regarding the company's future outlook and operational challenges.
- Legal Investigation Initiated: Pomerantz LLP is investigating Brown & Brown and its executives for potential securities fraud or other unlawful business practices, which could further impact the company's reputation and shareholder confidence.
See More
Brown & Brown Stock Rating Downgraded
- Rating Maintenance and Price Target Cut: Michael Zaremski from BMO Capital and Yaron Kinar from Mizuho Securities both maintained a Hold rating on Brown & Brown (NYSE:BRO), lowering their price targets from $88 to $81 and from $90 to $84 respectively, indicating a cautious market outlook.
- Valuation Analysis: Zaremski noted that while P/E ratios are at discounted levels, the enterprise value to EBITDA and free cash flow yield remain expensive compared to the S&P 500, suggesting limited attractiveness for the stock.
- Earnings Forecast Adjustment: BMO Capital reduced its EBITDA estimates for Brown & Brown by approximately 3% and projected a 2.4% organic growth in 2026, reflecting a cautious stance on the company's future growth prospects.
- Lack of Positive Catalysts: Analysts believe there are no positive catalysts to drive the stock price higher in the near term, hence the Hold rating and reduced price target, indicating a pessimistic outlook for the stock's short-term performance.
See More
