UPDATE: Compass Point Initiates Brown & Brown at Buy on Best Operating Margins

In a report published Tuesday, Compass Point analyst Ken Billingsley initiated coverage on Brown & Brown BRO with a Buy rating and $40.00 price target.

In the report, Compass Point noted, “BRO has historically had the best operating margins of its peers (19.3% in 2012 versus 8.3% for the peer average). Despite this, the company has not always traded at the highest P/E multiple. We believe BRO will again trade near its peak over the coming years as premium rates continue to rise, the economy strengthens, and a recent acquisition expands investor and customer perception of who is the target customer for BRO.”

Brown & Brown closed on Monday at $32.77.