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

Zacks Equity Research

Berkshire Hathaway Inc. (BRK.B) closed at $210.33 in the latest trading session, marking a -1.54% move from the prior day. This move lagged the S&P 500's daily loss of 0.31%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.28%.

Heading into today, shares of the company had gained 7.72% over the past month, outpacing the Finance sector's gain of 4.26% and the S&P 500's gain of 2.92% 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 $2.87 per share. This would mark year-over-year growth of 2.87%.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.39 per share and revenue of $297.69 billion, which would represent changes of +3.33% and +20.11%, respectively, from the prior year.

Any recent changes to analyst estimates for BRK.B should also be noted by investors. 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.

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 remained stagnant. BRK.B currently has a Zacks Rank of #4 (Sell).

Looking at its valuation, BRK.B is holding a Forward P/E ratio of 20.57. For comparison, its industry has an average Forward P/E of 14.53, which means BRK.B is trading at a premium to the group.

Also, we should mention that BRK.B has a PEG ratio of 2.94. 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 1.49 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 46, which puts it in the top 18% 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.

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


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