Brown & Brown, Inc. (BRO): A Bull Case Theory

We came across a bullish thesis on Brown & Brown, Inc. on Rigatoni Capital’s Substack. In this article, we will summarize the bulls’ thesis on BRO. Brown & Brown, Inc.'s share was trading at $81.18 as of December 1st. BRO’s trailing and forward P/E were 24.60 and 17.01 respectively according to Yahoo Finance.

Brown & Brown, Inc. (BRO) is a $30 billion market-cap insurance brokerage offering services across four segments: Retail, National Programs/Specialty Distribution, Wholesale Brokerage, and Services. Unlike traditional carriers, BRO earns commissions and fees rather than underwriting risk, generating highly resilient, cash-rich earnings that have grown steadily through organic expansion and a long history of bolt-on acquisitions. Its business model emphasizes shareholder returns, with consistent dividend growth and opportunistic buybacks, and management has a strong track record under CEO J. Powell Brown since 2009.

In Q2 2025, BRO reported revenue of $1.3 billion, up 9.1% YoY, driven by 3.6% organic growth despite a softening insurance market, particularly in property lines, and adjusted EBITDA margins expanding 100 bps to 36.7%. Adjusted EPS rose 10% to $1.03, with cash flow from operations of $537 million in the first half of 2025, up $164 million YoY. The company remains active in M&A, completing 15 acquisitions in Q2 totaling $22 million in annual revenue, highlighted by the $9.83 billion Accession deal (Risk Strategies + One80), financed with $4.4 billion equity and $4.2 billion debt, while setting aside $750 million for associated runoff businesses.

Programs and Wholesale will merge into a consolidated Specialty Distribution segment for improved operational focus. Looking ahead, BRO expects further rate declines in admitted and catastrophe property lines, while casualty and professional liability rates remain stable. The stock recently traded near $93, down from $125 earlier in 2025, offering a potential entry point for long-term investors attracted to its consistent cash generation, disciplined capital allocation, and growth via both organic expansion and strategic acquisitions.

Previously we covered a bullish thesis on Brown & Brown, Inc. (BRO) by Bulls On Parade in April 2025, highlighting consistent organic growth, disciplined acquisitions, and resilient cash generation. The stock has depreciated ~31.70% since then due to market softness. The thesis still stands as BRO maintains earnings and margin strength. Rigatoni Capital shares a similar view but emphasizes Q2 2025 results and the Accession acquisition.

Brown & Brown, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held BRO at the end of the second quarter which was 32 in the previous quarter. While we acknowledge the potential of BRO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.