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Brown & Brown (BRO) continues to attract attention from investors interested in the insurance sector’s performance and resilience. Recent price movement shows some volatility, which prompts questions around valuation and the company’s recent growth numbers.

See our latest analysis for Brown & Brown.

Brown & Brown’s share price has taken a hit recently, dropping over 18% in the last month after some volatility in the broader insurance sector. While the 1-year total shareholder return sits at -29.7%, the bigger picture shows a strong recovery streak with gains of 41% and 72% over the past three and five years respectively. This reflects momentum that has cooled off lately but has not erased the longer-term growth story.

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With shares trading below analyst targets after recent declines, the key question remains: is Brown & Brown now undervalued, or has the market already accounted for future growth in the current price?

The fair value calculated in the most closely followed market narrative comes in at $97.08, which is significantly above Brown & Brown’s last close at $78.54. This valuation sets an optimistic tone that contrasts with recent price pressure, hinting at substantial upside potential if assumptions hold true.

Brown & Brown’s strategic focus on acquisitions, having completed 13 acquisitions with projected annual revenues of $36 million, could significantly enhance future revenue streams and market presence. This aligns with their goal of sustained revenue growth through expansion.

Read the complete narrative.

Curious about the foundation of this punchy price target? There is a bold set of financial predictions guiding this view, including various growth projections and a premium valuation multiple. This narrative relies on more than just headline numbers. Uncover the blueprint now that drives this aggressive estimate.

Result: Fair Value of $97.08 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent inflation and potential declines in key market segments could challenge Brown & Brown’s growth expectations and dampen the current bullish valuation narrative.

Find out about the key risks to this Brown & Brown narrative.

While the latest fair value estimate paints Brown & Brown as undervalued, looking at price ratios tells a more cautious story. Its price-to-earnings ratio stands at 27.1x, which is quite a bit higher than both the US insurance industry average of 13.2x and its fair ratio of 17.8x. Compared to peers, Brown & Brown looks cheaper than the group average of 47.1x, but against broader market and fair value benchmarks, the stock is on the expensive side. This gap raises questions about what could happen if market sentiment shifts. Will the price come into line, or is there more risk than meets the eye?

See what the numbers say about this price — find out in our valuation breakdown.

If you think there’s more to the story, or want to dig into the details yourself, you can easily build your own view from the ground up in just a few minutes, and Do it your way

A great starting point for your Brown & Brown research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Don’t let great opportunities slip by. The smartest investors always keep an eye out for new trends and sectors that are about to surge.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include BRO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Griffon (GFF) shares are drawing attention as investors weigh recent movements in the capital goods sector. The company has shown a mix of gains and dips in the past month. The stock’s longer-term performance has caught some eyes as well.

See our latest analysis for Griffon.

After a solid run over the past few years, Griffon’s 1-year total shareholder return of 4.9% might look modest. However, it follows a dramatic 3-year total return of over 130%. This signals that momentum may be pausing while investors reassess recent gains and future growth. The latest share price at $72.15 keeps Griffon in the spotlight for those tracking shifts in the capital goods space.

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With the share price cooling off after years of outperformance and analysts still seeing upside, is Griffon currently trading at a discount, or is the market correctly factoring in its next growth phase?

Griffon’s widely followed narrative points to a sizeable gap between its current share price and fair value, setting up a compelling debate over its long-term potential. The calculation relies on assumptions about robust future earnings and improved profitability in the coming years.

“Ongoing investments in automation and modernization projects, particularly in HBP, are expected to further improve operating efficiencies and gross margins over the next several years, bolstering future earnings and cash generation.”

Read the complete narrative.

Think the price target is too optimistic? The math behind this bullish call is built on impressive profit expansion and substantial margin improvement. Want to see which key variables drive this premium valuation and why? The answer lies in bold assumptions the market has not fully priced in yet.

Result: Fair Value of $100.29 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent weak consumer demand or heightened tariff pressures could challenge Griffon’s outlook. These factors may limit upside potential as assumptions are put to the test.

Find out about the key risks to this Griffon narrative.

If you see the story differently or want to put your own analysis to the test, you can dive in and shape your own insights in just minutes with Do it your way

A great starting point for your Griffon research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Smart investors know opportunity moves fast. Make sure you’re not left behind by expanding your watchlist with inspired picks tailored to your goals and interests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include GFF.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com