Value
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.7 |
| P/S | 7.9 |
| EV/EBITDA | 4.1 |
| Fwd P/E | 8.0 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 15.1x
- ▸PEG: 0.27
BRO · Why this verdict
Why Brown & Brown (BRO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Brown & Brown is an insurance broker with strong 18% margins and a breakout chart setup, but earnings growth is weak and the price of $69.76 is already above the $66.95 analyst target, leaving little upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Brown & Brown earns strong margins of 18% and a Piotroski F-Score of 7/9, supporting steady cash generation. Quality breakdown | Operating margin component score stays above 9.0 and Piotroski F-Score stays at 7 or higher. | ↓Deteriorating |
| CounterReturn on equity and return on assets component scores are only 3.3 and 2.6 out of 10, so high margins are not turning into strong returns on capital. | ||
Earnings growth is weak (component score 1.8) and the growth score of 3.4 is the weakest dimension, which limits the case for a higher multiple at 14.6x forward P/E. Components | Earnings growth component score rises above 5.0 over 12 months. | ↓Deteriorating |
| CounterA PEG of 0.24 implies the market already expects growth to accelerate; if it does not, the stock may de-rate. | ||
Price of $69.76 is above the analyst target of $66.95 (upside -4.0%), and risk-to-reward is -0.27, so little upside remains on the consensus view. Analyst target | Analysts raise the target above $72 as the stock holds its breakout. | ↓Deteriorating |
| CounterWith 15.0% downside to the stop and the target already exceeded, a pullback toward consensus is the more likely path. | ||
A golden cross with price above all moving averages and RSI near 63 marks a breakout setup, though the 200-day average slope is flat. Momentum breakdown | Price holds above the 200-day average and OBV turns from falling to rising. | ↑Improving |
| CounterFalling OBV signals volume distribution, so the breakout is not confirmed by buying volume. | ||
Brown & Brown is a dividend aristocrat with a 0.9% yield and a dividend safety score of 8.5 out of 10, supporting a defensive cash-flow profile. Catalyst breakdown | Dividend safety component stays above 7.5 and the dividend keeps growing. | ↓Deteriorating |
| CounterA 0.9% yield is small and offers little downside protection if the stock de-rates from 14.6x forward earnings. | ||
Brown & Brown earns strong margins of 18% and a Piotroski F-Score of 7/9, supporting steady cash generation.
↓DeterioratingQuality breakdown
- Expectation
- Operating margin component score stays above 9.0 and Piotroski F-Score stays at 7 or higher.
CounterReturn on equity and return on assets component scores are only 3.3 and 2.6 out of 10, so high margins are not turning into strong returns on capital.
Earnings growth is weak (component score 1.8) and the growth score of 3.4 is the weakest dimension, which limits the case for a higher multiple at 14.6x forward P/E.
↓DeterioratingComponents
- Expectation
- Earnings growth component score rises above 5.0 over 12 months.
CounterA PEG of 0.24 implies the market already expects growth to accelerate; if it does not, the stock may de-rate.
Price of $69.76 is above the analyst target of $66.95 (upside -4.0%), and risk-to-reward is -0.27, so little upside remains on the consensus view.
↓DeterioratingAnalyst target
- Expectation
- Analysts raise the target above $72 as the stock holds its breakout.
CounterWith 15.0% downside to the stop and the target already exceeded, a pullback toward consensus is the more likely path.
A golden cross with price above all moving averages and RSI near 63 marks a breakout setup, though the 200-day average slope is flat.
↑ImprovingMomentum breakdown
- Expectation
- Price holds above the 200-day average and OBV turns from falling to rising.
CounterFalling OBV signals volume distribution, so the breakout is not confirmed by buying volume.
Brown & Brown is a dividend aristocrat with a 0.9% yield and a dividend safety score of 8.5 out of 10, supporting a defensive cash-flow profile.
↓DeterioratingCatalyst breakdown
- Expectation
- Dividend safety component stays above 7.5 and the dividend keeps growing.
CounterA 0.9% yield is small and offers little downside protection if the stock de-rates from 14.6x forward earnings.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 2.6 |
| Gross margin | 6.0 |
| Op margin | 9.6 |
| Net margin | 8.9 |
| Current ratio | 4.4 |
| FCF quality | 7.0 |
| Moat | 5.8 |
| Piotroski F | 7.8 |
- ▸Strong margins: 18%
- ▸Strong Piotroski F-Score: 7/9
Growth
3.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.9 |
| EPS growth | 1.8 |
Momentum
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 3.4 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 5.0 |
| Price target | 5.8 |
Insider
5.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.8 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.4 |
| quality rank | 5.2 |
| growth rank | 4.7 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.1 |
| support resistance | 2.9 |
| 52w position | 4.8 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.7 |
| days to cover | 3.7 |
| volatility | 3.4 |
| put call | 3.1 |
| implied vol | 5.9 |
| max pain risk | 3.0 |
| beta | 9.9 |
| debt equity | 7.1 |
- ▸Elevated put/call: 1.54
- ▸Above max pain $35
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 8.5 |
| news activity | 6.0 |
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.3>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.50
- EARNINGS_PROXIMITY:83d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.4=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.40
Upside
-5.4%
Downside
13.4%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 62, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.3>=5.5. Top dim: Momentum at 7.3; weakest: Growth at 3.4. No conviction either direction.
The strongest dimensions are Momentum at 7.3, Value at 6.8, and Quality at 6.2; the weakest are Growth at 3.4, Technical at 3.6, and Risk (lower is worse) at 5.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.40 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Broker Margins
Trip ifNet margin falls below 14% from the current 18%.
- P2Weak Earnings Growth
Trip ifEarnings growth component score stays below 2.0 for 2 consecutive quarters.
- P3Price Above Analyst Target
Trip ifShare price falls below $64.94, the stop level, from the current $69.76.
- P4Breakout Above Moving Averages
Trip ifPrice falls below the 200-day average after a golden cross, with RSI dropping to 40.
- P5Dividend Aristocrat Stability
Trip ifDividend safety component score falls below 6.0 from the current 8.5.