It has been about a month since the last earnings report for Brown & Brown (BRO Quick QuoteBRO - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Brown & Brown due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Brown & Brown Q2 Earnings Beat Estimates, Improve Y/Y

Brown & Brown, Inc.’s second-quarter 2024 adjusted earnings of 93 cents per share beat the Zacks Consensus Estimate by 6.8%. The bottom line increased 17.7% year over year.

The quarterly results reflected improved organic revenues, expanded EBITDAC margin and increased net investment income, offset by higher expenses.

Q2 Details

Total revenues of $1.2 billion beat the Zacks Consensus Estimate by 3.3%. The top line improved 12.5% year over year. The upside can be primarily attributed to commission and fees, which grew 11.4% year over year to $1.1 billion. Our estimate for commission and fees growth was 7.2%.

Organic revenues improved 10% to $1 billion in the quarter under review.
Investment income more than doubled year over year to $22 million. The Zacks Consensus Estimate for the metric was pegged at $18.6 million and our estimate was $23.2 million.

Adjusted EBITDAC was $420 million, up 17.3% year over year. EBITDAC margin expanded 150 basis points (bps) year over year to 35.7%. Our estimate for adjusted EBITDAC was $411.4 million.

Total expenses increased 5% to $832 million due to a rise in employee compensation and benefits, other operating expenses, amortization, depreciation and interest. Our estimate was $831.4 million.

Financial Update

Brown & Brown exited the second quarter with cash and cash equivalents of $1.1 billion, which increased 58% from the 2023-end level. Long-term debt was $3.4 billion as of Jun 30, 2024, up 5% from the 2023-end level.

Net cash provided by operating activities in the first half of 2024 was $373 million, down 3.8% year over year.

Dividend Update

The board of directors paid a regular quarterly cash dividend of 13 cents per share in the reported quarter.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Brown & Brown has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Brown & Brown has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Brown & Brown belongs to the Zacks Insurance - Brokerage industry. Another stock from the same industry, Marsh & McLennan (MMC Quick QuoteMMC - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

Marsh & McLennan reported revenues of $6.22 billion in the last reported quarter, representing a year-over-year change of +5.9%. EPS of $2.41 for the same period compares with $2.20 a year ago.

For the current quarter, Marsh & McLennan is expected to post earnings of $1.62 per share, indicating a change of +3.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.

Marsh & McLennan has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.