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Berkshire Hathaway Inc. (BRK.B) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
First Hawaiian (FHB) delivered earnings and revenue surprises of 0.00% and -1.61%, respectively, for the quarter ended March 2019. Do the numbers hold clues to what lies ahead for the stock?

Berkshire Hathaway Inc. (BRK.B) closed at $205.15 in the latest trading session, marking a -0.74% move from the prior day. This change lagged the S&P 500's daily loss of 0.01%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, added 0.12%.

Heading into today, shares of the company had gained 0.68% over the past month, lagging the Finance sector's gain of 1.53% and the S&P 500's gain of 2.24% 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 $2.39 per share, which would represent year-over-year growth of 11.68%.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.84 per share and revenue of $275.35 billion. These totals would mark changes of +7.86% and +11.1%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for BRK.B. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 4.08% higher. BRK.B is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, BRK.B currently has a Forward P/E ratio of 19.08. This valuation marks a premium compared to its industry's average Forward P/E of 13.19.

Also, we should mention that BRK.B has a PEG ratio of 2.73. 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. Insurance - Property and Casualty stocks are, on average, holding a PEG ratio of 1.25 based on yesterday's closing prices.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 41% 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.

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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