Barclays Maintains an 'Equalweight' on Brown & Brown (BRO); 2Q11 EPS Lower Than Expected and Organic Growth Deteriorates

Barclays maintains an 'Equalweight' on Brown & Brown (NYSE: BRO), PT lowered by $2 to $25.

Barclays analyst says, "BRO's 2Q11 results were disappointing, reflecting lower than anticipated EPS as well as a deterioration in organic growth. Once the economy improves, BRO could benefit from positive operating leverage and EPS growth, although this appears to be occurring more slowly than we anticipated. Also, BRO does not appear to be experiencing much, if any, benefit from stabilizing P&C prices."

"We are lowering our EPS estimates for BRO to $1.15 from $1.25 in 2011
(consensus=$1.19) and to $1.30 from $1.40 in 2012 (consensus=$1.35) to reflect lower than anticipated 2Q11 results. BRO shares appear fairly valued at 18.3x our 2012E EPS of $1.30, which represents a 44% premium to the S&P 500 versus a historical premium of 20%. Laterals: Deterioration in BRO's organic growth versus 1Q11 is a negative lateral for Arthur�Gallagher (NYSE:�AJG), Willis Group (NYSE: WSH), Marsh & McLennan (NYSE: MMC), and Aon Corp (NYSE: AON)."

For more ratings news on Brown & Brown click here and for the rating history of Brown & Brown click here.

Shares of Brown & Brown closed at $23.84 yesterday.

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