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

Zacks Equity Research
·3-min read

In the latest trading session, Berkshire Hathaway Inc. (BRK.B) closed at $193.84, marking a +1.48% move from the previous day. This move outpaced the S&P 500's daily gain of 1.45%. Elsewhere, the Dow gained 1.22%, while the tech-heavy Nasdaq added 0.78%.

Coming into today, shares of the company had lost 1.87% in the past month. In that same time, the Finance sector lost 14.86%, while the S&P 500 lost 7.42%.

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 $2.42 per share, which would represent year-over-year growth of 7.08%.

BRK.B's full-year Zacks Consensus Estimates are calling for earnings of $10.23 per share and revenue of $210.59 billion. These results would represent year-over-year changes of +4.6% and -17.29%, respectively.

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Investors might also notice recent changes to analyst estimates for BRK.B. Recent revisions tend to reflect the latest near-term business trends. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.26% lower within the past month. BRK.B is currently a Zacks Rank #4 (Sell).

Looking at its valuation, BRK.B is holding a Forward P/E ratio of 18.67. Its industry sports an average Forward P/E of 10.3, so we one might conclude that BRK.B is trading at a premium comparatively.

Meanwhile, BRK.B's PEG ratio is currently 2.67. 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 1.32 based on yesterday's closing prices.

The Insurance - Property and Casualty industry is part of the Finance sector. This group has a Zacks Industry Rank of 142, putting it in the bottom 45% 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.

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


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