Brown & Brown: 2Q26 Wrap: Valuation Attractive, But Slower Organic Growth and Property Exposure Headwinds; Neutral

研报英文原文证据摘录

Brown & Brown: 2Q26 Wrap: Valuation Attractive, But Slower Organic Growth and Property Exposure Headwinds; Neutral

Pablo S. Singzon AC North America Equity Research

(1-212) 622-2295 03 August 2026 J P M O R G A N

pablo.s.singzon@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

We are Neutral on BRO. Brown & Brown is a top 10 US-

focused middle market commercial P&C broker that owns a top

3 MGA (Arrowhead) and a top 5 wholesaling business, Bridge

Specialty. The company has a track record of delivering low- to

mid-single-digit organic growth, generating incremental

growth through consistent M&A, and maintaining sector-

leading margins and cash flow conversion. Over time, however,

this margin gap has narrowed as other brokers have scaled up,

extracted efficiencies by offshoring support functions, and shed

YTD 1m 3m 12m lower-margin businesses. At the same time, BRO has been

Abs -11.7% 9.7% 17.0% -23.0% gradually moving into areas traditionally dominated by its larger

Rel -21.1% 9.9% 13.1% -41.1%

peers, mainly through more large-scale M&A, which in our view

Company Data introduces more operational risk in the company’s traditional

Shares O/S (mn) 330 operating model. Although BRO’s stock has pulled back and is

52-week range ($) 98.30-53.81 trading at a discount to peers, we remain Neutral due to its likely

Market cap ($ mn) 23,232.00

Exchange rate 1.00 below-average organic growth in the current environment, the

Free float (%) 86.6% execution risk of integrating Accession, and its narrowing

3M ADV (mn) 3.25 margin gap with other brokers.

3M ADV ($ mn) 200.5

Volatility (90 Day) 37

Index S&P 500

Performance DriversBBG ANR (Buy | Hold | Sell) 4|15|1

Key Metrics (FYE Dec)

$ in millions FY25A FY26E FY27E FY28E

Financial Estimates