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

Zacks Equity Research
·3 mins read

Berkshire Hathaway Inc. (BRK.B) closed the most recent trading day at $210.45, moving +0.83% from the previous trading session. This change lagged the S&P 500's 1.6% gain on the day. Elsewhere, the Dow gained 1.34%, while the tech-heavy Nasdaq added 2.26%.

Heading into today, shares of the company had lost 3.76% over the past month, outpacing the Finance sector's loss of 5.95% and the S&P 500's loss of 5.3% in that time.

Wall Street will be looking for positivity from BRK.B as it approaches its next earnings report date. In that report, analysts expect BRK.B to post earnings of $2.38 per share. This would mark a year-over-year decline of 25.86%.

BRK.B's full-year Zacks Consensus Estimates are calling for earnings of $9.50 per share and revenue of $223.13 billion. These results would represent year-over-year changes of -2.86% and -12.37%, respectively.

It is also important to note the recent changes to analyst estimates for BRK.B. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. BRK.B is currently a Zacks Rank #4 (Sell).

Valuation is also important, so investors should note that BRK.B has a Forward P/E ratio of 21.97 right now. Its industry sports an average Forward P/E of 13.04, so we one might conclude that BRK.B is trading at a premium comparatively.

We can also see that BRK.B currently has a PEG ratio of 3.14. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Insurance - Property and Casualty industry currently had an average PEG ratio of 2.07 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 116, which puts it in the top 46% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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Zacks Investment Research