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Brown & Brown's Q1 Report Shows Organic Revenue Growth Under Continued Pressure, UBS Says

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-- Brown & Brown's (BRO) Q1 report shows that the company's organic revenue growth continues to remain under pressure despite better than expected quarterly earnings per share and adjusted margins, UBS said in a note.

The company's flat Q1 organic revenue growth was below UBS expectations of a 2% growth and consensus of 1.3%, UBS said on Monday. The metric further excluded $10 million in litigation related lost revenue, which was in-line with expectations, according to UBS.

Looking ahead, Brown & Brown expects catastrophe property rates to continue to experience downward pressure in Q2, while economic growth should remain relatively stable, UBS said. The company's capital allocation will have a bias toward buybacks and paying down debt, while remaining active for specialty and smaller deals, UBS added.

UBS maintained its neutral rating on the company's stock with an $81 price target.

Shares of Brown & Brown were down over 6% in Tuesday trading.

Price: $62.07, Change: $-4.06, Percent Change: -6.13%

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