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

Zacks Equity Research

Berkshire Hathaway Inc. (BRK.B) closed at $211.61 in the latest trading session, marking a +1.01% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.88%. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq added 1.32%.

Coming into today, shares of the company had gained 5.04% in the past month. In that same time, the Finance sector gained 4.46%, while the S&P 500 gained 3.96%.

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 $2.39 per share. This would mark 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.

Investors might also notice 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.

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 holding a Zacks Rank of #2 (Buy) right now.

Investors should also note BRK.B's current valuation metrics, including its Forward P/E ratio of 19.33. This valuation marks a premium compared to its industry's average Forward P/E of 14.18.

Meanwhile, BRK.B's PEG ratio is currently 2.76. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Insurance - Property and Casualty was holding an average PEG ratio of 1.29 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 151, which puts it in the bottom 41% 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.

To follow BRK.B in the coming trading sessions, be sure to utilize Zacks.com.


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