Yahoo Finance Brown & Brown, Inc. Just Recorded A 18% EPS Beat: Here's What Analysts Are Forecasting Next
Brown & Brown, Inc. (NYSE:BRO) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.3% to hit US$1.2b. Brown & Brown reported statutory earnings per share (EPS) US$0.90, which was a notable 18% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Brown & Brown
Taking into account the latest results, the most recent consensus for Brown & Brown from nine analysts is for revenues of US$4.69b in 2024. If met, it would imply a credible 4.3% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 5.6% to US$3.27 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$4.65b and earnings per share (EPS) of US$3.15 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$97.68, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Brown & Brown, with the most bullish analyst valuing it at US$112 and the most bearish at US$81.14 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Brown & Brown's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.8% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.8% per year. Even after the forecast slowdown in growth, it seems obvious that Brown & Brown is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Brown & Brown's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$97.68, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Brown & Brown. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Brown & Brown going out to 2026, and you can see them free on our platform here..
Even so, be aware that Brown & Brown is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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