Yahoo Finance Why Is Brown & Brown (BRO) Up 0.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Brown & Brown (BRO). Shares have added about 0.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Brown & Brown's Q1 Earnings Top, Revenues Rise Y/Y
Brown & Brown, Inc.’s first-quarter 2023 adjusted earnings of 84 cents per share beat the Zacks Consensus Estimate by 3.7%. The bottom line increased 13.5% year over year.
The quarterly results reflected improved organic growth and higher net investment income, partly offset by higher expenses.
Q1 Details
Total revenues of $1.1 billion beat the Zacks Consensus Estimate by 5.1%. The top line improved 23.6% year over year. The upside can be primarily attributed to commission and fees, which grew 22.5% year over year to $1.1 million.
Organic revenues improved 12.6% to $967.3 million in the quarter under review.
Investment income increased year over year to $7 million from $0.2 million in the year-ago quarter.
Adjusted EBITDAC was $398.2 million, up 23.2% year over year. EBITDAC margin remained flat year over year at 35.7%.
Total expenses increased 28.5% to $821.8 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest expenses.
Financial Update
Brown & Brown exited 2022 with cash and cash equivalents of $563.5 million, down 13.3% from the 2022-end level. Long-term debt of $3.6 billion as of Mar 31, 2023 slipped 0.3% from 2022 end.
Net cash provided by operating activities in 2022 was $59.8.4 million, down 43.3% year over year.
Dividend Update
The board of directors approved a regular quarterly cash dividend of 11.50 cents per share, paid out on May 17, 2023, to shareholders of record on May 8, 2023.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Brown & Brown has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brown & Brown has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Brown & Brown, Inc. (BRO) : Free Stock Analysis Report
