Barclays Downgrades Price Target on Brown & Brown (BRO), Citing Elevated Valuation and Macro Risks

Barclays has revised its price target for Brown & Brown Inc. (BRO) to $145, down from $165, citing elevated stock valuation and heightened macroeconomic uncertainty. The firm maintains an 'Overweight' rating, but the downward adjustment underscores growing skepticism about near-term upside potential despite strong underlying fundamentals in the commercial insurance segment. The revision comes amid broader concerns over rising interest rates and softening demand in certain insurance lines, particularly in property and casualty. Brown & Brown reported third-quarter 2025 revenue of $1.23 billion, up 5.1% year-over-year, but net income growth slowed to 3.7%, falling short of expectations. The company’s forward P/E ratio now stands at 17.8x, above the sector average of 15.4x, which Barclays views as a headwind. Analysts note that while BRO has consistently delivered double-digit revenue growth over the past five years, the current pace of expansion is moderating. The firm also highlights increased competition in niche markets and rising reinsurance costs as structural pressures affecting margins. Despite these challenges, Barclays expects BRO to maintain its market share in the mid-sized commercial insurance space due to its extensive distribution network. The adjustment has prompted modest trading activity, with BRO down 1.8% in after-hours trading. Institutional investors are reassessing exposure, particularly in high-conviction insurance portfolios. The change may influence benchmark weighting decisions among index fund managers with exposure to financial services.