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Berkshire Hathaway Inc. (BRK.B) Gains As Market Dips: What You Should Know

Zacks Equity Research

Berkshire Hathaway Inc. (BRK.B) closed at $206.66 in the latest trading session, marking a +0.94% move from the prior day. This move outpaced the S&P 500's daily loss of 0.01%. Meanwhile, the Dow gained 0.14%, and the Nasdaq, a tech-heavy index, lost 0.19%.

Heading into today, shares of the company had gained 2.1% over the past month, outpacing the Finance sector's gain of 1.48% and lagging the S&P 500's gain of 3.61% in that time.

Investors will be hoping for strength from BRK.B as it approaches its next earnings release. On that day, BRK.B is projected to report earnings of $2.87 per share, which would represent year-over-year growth of 2.87%.

BRK.B's full-year Zacks Consensus Estimates are calling for earnings of $10.39 per share and revenue of $297.69 billion. These results would represent year-over-year changes of +3.38% and +20.11%, respectively.

It is also important to note the recent changes to analyst estimates for BRK.B. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.67% lower. BRK.B is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that BRK.B has a Forward P/E ratio of 19.71 right now. Its industry sports an average Forward P/E of 15.32, so we one might conclude that BRK.B is trading at a premium comparatively.

It is also worth noting that BRK.B currently has a PEG ratio of 2.82. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. BRK.B's industry had an average PEG ratio of 1.48 as of yesterday's close.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 52, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow BRK.B in the coming trading sessions, be sure to utilize Zacks.com.


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