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Berkshire Hathaway (BRK.B) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Berkshire Hathaway (BRK.B) closed at $204.31, marking a +1.19% move from the previous day. The stock lagged the S&P 500's daily gain of 1.23%. Meanwhile, the Dow gained 1.6%, and the Nasdaq, a tech-heavy index, added 0.42%.

Prior to today's trading, shares of the company had lost 4.77% over the past month. This has lagged the Finance sector's loss of 0.42% and the S&P 500's loss of 2.51% in that time.

BRK.B will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.29, down 28.66% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.40 per share and revenue of $227.35 billion. These totals would mark changes of -3.89% and -10.71%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for BRK.B. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. BRK.B is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note BRK.B's current valuation metrics, including its Forward P/E ratio of 21.48. For comparison, its industry has an average Forward P/E of 13.56, which means BRK.B is trading at a premium to the group.

Investors should also note that BRK.B has a PEG ratio of 3.07 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Insurance - Property and Casualty was holding an average PEG ratio of 1.99 at yesterday's closing price.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 225, which puts it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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