UPDATE: Barclays Downgrades Brown & Brown (BRO) to Equalweight; P&C Price Increases Peak

July 31, 2012 7:55 AM EDT
Get Alerts BRO Hot Sheet
Price: $43.83 -0.11%

Rating Summary:
    4 Buy, 13 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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(Updated - July 31, 2012 2:32 PM EDT)

Barclays downgraded Brown & Brown (NYSE: BRO) from Overweight to Equalweight with a price target of $27.00 (from $30.00).

"Commercial P&C insurance pricing increased 4% y/y on average in 2Q12, in line with the pace of rate increases in the prior quarter. This means the pace of rate increases did not accelerate vs the prior quarter for the first time since 3Q11, according to the latest survey by the Council of Insurance Agents & Brokers. We view this data point as a negative development for the insurance brokers because these stocks are early P&C cycle plays. As a result, we downgrade both BRO and Arthur J. Gallagher (NYSE: AJG)."

FY12 EPS estimates lowered from $1.27 to $1.22 and FY13 from $1.45 to $1.40.

Gelb's Top Picks in P&C insurance are Ace Ltd (NYSE: ACE) and Arch Capital Group Ltd. (Nasdaq: ACGL)

For an analyst ratings summary and ratings history on Brown & Brown click here. For more ratings news on Brown & Brown click here.

Shares of Brown & Brown closed at $25.70 yesterday.

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