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

Core Thesis - Brown & Brown, Inc. (BRO) is viewed positively due to its resilient business model, consistent cash generation, and strategic acquisitions, despite recent market softness [1][6]. Company Overview - Brown & Brown, Inc. has a market capitalization of $30 billion and operates in four segments: Retail, National Programs/Specialty Distribution, Wholesale Brokerage, and Services [3]. - The company generates revenue through commissions and fees rather than underwriting risk, leading to stable and cash-rich earnings [3]. Financial Performance - In Q2 2025, BRO reported revenue of $1.3 billion, reflecting a 9.1% year-over-year increase, with 3.6% organic growth [4]. - Adjusted EBITDA margins expanded by 100 basis points to 36.7%, and adjusted EPS increased by 10% to $1.03 [4]. - Cash flow from operations for the first half of 2025 was $537 million, up $164 million year-over-year [4]. M&A Activity - The company completed 15 acquisitions in Q2 2025, totaling $22 million in annual revenue, including the significant $9.83 billion Accession deal [4]. - The Accession deal was financed with $4.4 billion in equity and $4.2 billion in debt, with an additional $750 million set aside for associated runoff businesses [4]. Market Outlook - The company anticipates further rate declines in admitted and catastrophe property lines, while casualty and professional liability rates are expected to remain stable [5]. - The stock price has decreased from $125 to near $93 in 2025, presenting a potential entry point for long-term investors [5]. Investment Sentiment - Despite a ~31.70% depreciation in stock value since April 2025, the bullish thesis remains intact due to BRO's earnings and margin strength [6].