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Berkshire Hathaway Inc. (BRK.B) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Berkshire Hathaway Inc. (BRK.B) closed at $206.86, marking a +0.08% move from the previous day. This change lagged the S&P 500's 0.64% gain on the day. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.6%.

Heading into today, shares of the company had lost 2% over the past month, lagging the Finance sector's loss of 1.45% and the S&P 500's loss of 1.87% in that time.

Investors will be hoping for strength from BRK.B as it approaches its next earnings release. On that day, BRK.B is projected to report earnings of $2.87 per share, which would represent 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 +3.38% and +20.11%, respectively, from the prior 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 #3 (Hold).

Looking at its valuation, BRK.B is holding a Forward P/E ratio of 19.9. This valuation marks a premium compared to its industry's average Forward P/E of 14.5.

Also, we should mention that BRK.B has a PEG ratio of 2.84. 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. The Insurance - Property and Casualty industry currently had an average PEG ratio of 1.57 as of yesterday's close.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 34, which puts it in the top 14% 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.

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


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