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

Zacks Equity Research
·3 mins read

Berkshire Hathaway Inc. (BRK.B) closed the most recent trading day at $212.02, moving -0.43% from the previous trading session. This change lagged the S&P 500's daily gain of 0.53%. Meanwhile, the Dow gained 0.13%, and the Nasdaq, a tech-heavy index, added 1.42%.

Prior to today's trading, shares of the company had lost 3.94% over the past month. This has lagged the Finance sector's loss of 3.82% and the S&P 500's loss of 3.76% in that time.

BRK.B will be looking to display strength as it nears its next earnings release. In that report, analysts expect BRK.B to post earnings of $2.18 per share. This would mark a year-over-year decline of 32.09%.

BRK.B's full-year Zacks Consensus Estimates are calling for earnings of $9.40 per share and revenue of $223.13 billion. These results would represent year-over-year changes of -3.89% 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.05% lower. BRK.B is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note BRK.B's current valuation metrics, including its Forward P/E ratio of 22.65. Its industry sports an average Forward P/E of 13.5, so we one might conclude that BRK.B is trading at a premium comparatively.

Meanwhile, BRK.B's PEG ratio is currently 3.24. 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 2.1 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 174, putting it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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