BRO Should I Buy
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Brown & Brown Inc (BRO) is not a strong buy at the moment for a beginner investor with a long-term focus. While the company has demonstrated solid revenue and net income growth in its latest quarter, the technical indicators, options data, and analyst sentiment suggest a lack of immediate upside potential. Additionally, the absence of positive catalysts, coupled with Congress members selling the stock and hedge funds reducing their positions, indicates caution. Holding off on investment until clearer growth catalysts emerge is advisable.
The technical indicators are bearish. The MACD is negative and contracting, the RSI is neutral at 40.836, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below key pivot levels, with support at 66.942 and resistance at 70.609.
The company has initiated a $250 million accelerated share repurchase program as part of a $1.5 billion authorization, which could enhance shareholder value over time.
Analysts have broadly lowered price targets, citing growth headwinds, softening P&C pricing, and a lack of near-term catalysts. Hedge funds are selling the stock, with a 415.35% increase in selling activity last quarter. Congress members have also sold the stock recently, with no purchase transactions recorded.
In Q4 2025, revenue increased by 35.84% YoY to $1.607 billion, net income rose by 27.54% YoY to $264 million, and EPS grew by 8.33% YoY to 0.78. However, gross margin dropped to 0, down 100% YoY, which is a significant concern.
Analysts have a neutral to cautious outlook on the stock. Multiple firms, including BMO Capital, UBS, and Goldman Sachs, have lowered their price targets, citing softening growth trends and a lack of catalysts. Keefe Bruyette upgraded the stock to Market Perform from Underperform but also reduced the price target. The consensus reflects limited upside potential in the near term.
