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

Zacks

In the latest trading session, Berkshire Hathaway Inc. (BRK.B) closed at $206.70, marking a +0.74% move from the previous day. This change lagged the S&P 500′s 1.42% gain on the day. At the same time, the Dow added 1.15%, and the tech-heavy Nasdaq gained 2.29%.

Heading into today, shares of the company had lost 4.51% over the past month, outpacing the Finance sector’s loss of 4.93% and the S&P 500′s loss of 5.36% in that time.

Wall Street will be looking for positivity from BRK.B as it approaches its next earnings report date. This is expected to be November 2, 2018. The company is expected to report EPS of $2.47, up 76.43% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.90 per share and revenue of $248.35 billion, which would represent changes of +68.94% and +2.56%, respectively, from the prior year.


Investors might also notice recent changes to analyst estimates for BRK.B. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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 remained stagnant. BRK.B is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, BRK.B is holding a Forward P/E ratio of 20.74. For comparison, its industry has an average Forward P/E of 13.06, which means BRK.B is trading at a premium to the group.

Investors should also note that BRK.B has a PEG ratio of 2.96 right now. 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. BRK.B’s industry had an average PEG ratio of 1.22 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 106, putting it in the top 42% 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.

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


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