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

Zacks Equity Research

In the latest trading session, Berkshire Hathaway Inc. (BRK.B) closed at $210.26, marking a -0.33% move from the previous day. This move lagged the S&P 500's daily gain of 0.19%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq gained 0.81%.

Prior to today's trading, shares of the company had gained 1.37% over the past month. This has lagged the Finance sector's gain of 1.46% and outpaced the S&P 500's gain of 0.56% in that time.

BRK.B will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.78, down 0.36% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10.34 per share and revenue of $303.52 billion, which would represent changes of +2.89% and +22.47%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for BRK.B. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.43% lower within the past month. BRK.B is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, BRK.B is holding a Forward P/E ratio of 20.4. This represents a premium compared to its industry's average Forward P/E of 14.8.

Meanwhile, BRK.B's PEG ratio is currently 2.91. 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. Insurance - Property and Casualty stocks are, on average, holding a PEG ratio of 1.61 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 86, which puts it in the top 34% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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