Markets

Berkshire Hathaway (BRK.B) Dips More Than Broader Markets: What You Should Know

Berkshire Hathaway (BRK.B) closed at $206.88 in the latest trading session, marking a -0.77% move from the prior day. This change lagged the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.8%, and the tech-heavy Nasdaq gained 0.64%.

Coming into today, shares of the company had lost 2.36% in the past month. In that same time, the Finance sector gained 5.27%, while the S&P 500 gained 3.25%.

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 $2.29 per share, which would represent a year-over-year decline of 28.66%.

BRK.B's full-year Zacks Consensus Estimates are calling for earnings of $9.40 per share and revenue of $227.35 billion. These results would represent year-over-year changes of -3.89% and -10.71%, respectively.

Investors should also note any 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.05% lower. BRK.B is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that BRK.B has a Forward P/E ratio of 22.18 right now. This valuation marks a premium compared to its industry's average Forward P/E of 14.17.

Also, we should mention that BRK.B has a PEG ratio of 3.17. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. BRK.B's industry had an average PEG ratio of 2.01 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 222, which puts it in the bottom 13% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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