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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 $222.34 in the latest trading session, marking a -1.99% move from the prior day. This change lagged the S&P 500's daily loss of 1.57%. At the same time, the Dow lost 1.57%, and the tech-heavy Nasdaq lost 1.89%.

Coming into today, shares of the company had gained 0.18% in the past month. In that same time, the Finance sector gained 0.29%, while the S&P 500 gained 2.35%.

BRK.B will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.53, up 9.05% from the prior-year quarter.

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 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.

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. Within the past 30 days, our consensus EPS projection has moved 0.69% lower. BRK.B is holding a Zacks Rank of #4 (Sell) right now.

Looking at its valuation, BRK.B is holding a Forward P/E ratio of 20.89. This valuation marks a premium compared to its industry's average Forward P/E of 13.88.

Also, we should mention that BRK.B has a PEG ratio of 2.98. 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 1.72 as of yesterday's close.

The Insurance - Property and Casualty industry is part of the Finance sector. This group has a Zacks Industry Rank of 69, putting it in the top 28% 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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