Berkshire Hathaway Upped to Strong Buy - Analyst Blog

By Zacks Equity Research,

Shutterstock photo

On Mar 4, Zacks Investment Research upgraded Berkshire Hathaway Inc. (BRK.A) ( BRK.B ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Berkshire Hathaway has been witnessing rising earnings estimates on the back of a strong fourth-quarter 2013. Moreover, this conglomerate with over 80 businesses, delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 20.4%. The long-term expected earnings growth rate for this stock is 7%.    

Berkshire Hathaway reported fourth-quarter and full year 2013 results on Mar 1.  Operating earnings of $1.53 per share handily beat the Zacks Consensus Estimate of $1.40.

Earnings also compared favorably with $1.14 per share reported in the year-ago quarter. The earnings outperformance resulted from solid results in Berkshire's insurance, energy as well as manufacturing, retail and service businesses.

Total revenue for full-year 2013 surged 12% year over year to $182.2 billion in 2013 led by higher revenues across all business segments - Insurance, Railroad, Utilities and Energy as well as Financial and Financial products.

Berkshire's property and casualty insurance business acts as the primary impetus driving growth at the company. Berkshire's economically sensitive non-insurance businesses - utilities and energy, and manufacturing, service and retail have also shown exceptional performance and is expected to make increased contribution in 2014, with improving economy.  Berkshire's Finance and Financial Products segment is also performing well now after suffering from the soft housing market trends in the recent past.

Following the earnings release, the Zacks Consensus Estimate for 2014 increased 1.0% to $6.28 per share as 1 of the 2 estimates were revised higher over the last 7 days. For 2015, one of the analysts covering the stock revised its estimates higher over the same time frame, lifting the Zacks Consensus Estimate by 2.9% to $7.15 per share.

Other Stocks to Consider

Other property and casualty insurers which look attractive at current levels, include Alleghany Corp. ( Y ), American Financial Group Inc. ( AFG ) and Am Trust Financial Servcies, Inc. ( AFSI ). All these sport the same Zacks Rank as Berkshire.

AMER FINL GROUP (AFG): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

BERKSHIRE HTH-B (BRK.B): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AFG , AFSI , Y

More from


Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by