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Berkshire Hathaway Inc. (BRK.B) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Is (MSFT) Outperforming Other Computer and Technology Stocks This Year?

In the latest trading session, Berkshire Hathaway Inc. (BRK.B) closed at $207.02, marking a +0.59% move from the previous day. This change outpaced the S&P 500's 0.47% gain on the day. Meanwhile, the Dow gained 0.3%, and the Nasdaq, a tech-heavy index, added 1.05%.

Coming into today, shares of the company had lost 1.32% in the past month. In that same time, the Finance sector lost 0.73%, while the S&P 500 lost 0.08%.

BRK.B will be looking to display strength as it nears its next earnings release. On that day, BRK.B is projected to report earnings of $2.71 per share, which would represent a year-over-year decline of 2.87%.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $10.53 per share and revenue of $275.35 billion. These totals would mark changes of +4.78% and +11.1%, respectively, from last year.

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. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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. The Zacks Consensus EPS estimate has moved 1.25% higher within the past month. BRK.B is currently sporting a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that BRK.B has a Forward P/E ratio of 19.55 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.42.

We can also see that BRK.B currently has a PEG ratio of 2.79. 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. Insurance - Property and Casualty stocks are, on average, holding a PEG ratio of 1.45 based on yesterday's closing prices.

The Insurance - Property and Casualty industry is part of the Finance sector. This group has a Zacks Industry Rank of 45, putting it in the top 18% 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.

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


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