Berkshire Hathaway B (BRK.B) has recently been on Zacks.com’s list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock’s performance in the near future.
Over the past month, shares of this company have returned +0.8%, compared to the Zacks S&P 500 composite’s +0.9% change. During this period, the Zacks Insurance – Property and Casualty industry, which Berkshire Hathaway B falls in, has gained 1%. The key question now is: What could be the stock’s future direction?
While media releases or rumors about a substantial change in a company’s business prospects usually make its stock ‘trending’ and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company’s earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors’ interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Berkshire Hathaway B is expected to post earnings of $3.31 per share for the current quarter, representing a year-over-year change of +1.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +14.5%.
For the current fiscal year, the consensus earnings estimate of $14.85 points to a change of +22.5% from the prior year. Over the last 30 days, this estimate has changed +6.6%.
For the next fiscal year, the consensus earnings estimate of $16.62 indicates a change of +11.9% from what Berkshire Hathaway B is expected to report a year ago. Over the past month, the estimate has changed +12.3%.
With an impressive externally audited track record, our proprietary stock rating tool — the Zacks Rank — is a more conclusive indicator of a stock’s near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Berkshire Hathaway B.
The chart below shows the evolution of the company’s forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
Even though a company’s earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It’s almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company’s potential revenue growth is crucial.
For Berkshire Hathaway B, the consensus sales estimate for the current quarter of $74.56 billion indicates a year-over-year change of +3.8%. For the current and next fiscal years, $298.48 billion and $305.9 billion estimates indicate +8.1% and +2.5% changes, respectively.
Last Reported Results and Surprise History
Berkshire Hathaway B reported revenues of $76.93 billion in the last reported quarter, representing a year-over-year change of +9%. EPS of $3.53 for the same period compares with $2.87 a year ago.
Compared to the Zacks Consensus Estimate of $74.92 billion, the reported revenues represent a surprise of +2.69%. The EPS surprise was +13.87%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates two times over this period.
No investment decision can be efficient without considering a stock’s valuation. Whether a stock’s current price rightly reflects the intrinsic value of the underlying business and the company’s growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company’s valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Berkshire Hathaway B is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
The facts discussed here and much other information on Zacks.com might help determine whether or not it’s worthwhile paying attention to the market buzz about Berkshire Hathaway B. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The Dow Jones Industrial Average fell Monday after last week's heavy losses. Tesla stock jumped early on Elon Musk's Twitter poll that said he should step down, but quickly reversed lower.
Conestoga Capital Advisors, an asset management company, released its “Small Cap Growth Fund” third-quarter investor letter. A copy of the same can be downloaded here. The fund declined 4.56% net of fees in the third quarter, compared to a 0.24% return for Russell 2000 Growth Index. Stock selection and negative sector allocation impacted the fund’s performance in […]
A Wall Street analyst warns that things could get even worse for the e-commerce and cloud giant next year.
Against a backdrop of soaring inflation, a slowing economy and persistent rate hikes, assessing the playbook for the coming year, CNBC’s Jim Cramer says it’s more important than ever to look at the past year and see what worked. Basically, which stocks have managed to overcome the bear conditions. Within the components of the S&P 500, energy and utilities have been segments that have beaten the broader market, and generally speaking, so have those of the healthcare sector. But healthcare stocks,
(Bloomberg) — The yen rallied while stocks and bonds slumped in the wake of the Bank of Japan’s unexpected adjustment to its yield-curve control policy. Most Read from BloombergMusk Polls Twitter to Quit as Chief, Voters Leaning Toward YesJustin Bieber Urges Fans Not to Buy His Own ‘Trash’ Merchandise at H&MTwitter Users Vote for Elon Musk to Step Down as CEOTech’s Bust Delivers Bruising Blow to Hollowed-Out San FranciscoMusk Says Twitter Will Restrict Voting on Policy to Blue MembersA day that
One thing is certain these days, and that’s uncertainty. Markets remain volatile, as a series of data releases have investors somewhat unsure whether high inflation, rising interest rates, or a possible recession – or perhaps all three at once – will come to dominate the forecasts. The result: day-to-day price swings and sharp changes that make predictions a risky business. Not every economist, however, is willing to throw in the towel, and the difficult market environment hasn’t put the scare o
Nio (NYSE: NIO) shares are starting off the week on another down note after a more than 7% decline last week. Today, Nio shares were down 5.6% as of 11:30 a.m. ET as concerns mount over COVID-19 cases in China and economic conditions elsewhere. Investors are counting on the fourth quarter being a pivotal time for Nio's electric vehicle (EV) sales.
Yahoo Finance Live anchors discuss MoffettNathanson’s 2023 profit outlook for Verizon and AT&T.
FEATURE Lucid stock is rising in late trading Monday after the company said it has raised a substantial sum of money. Monday evening, the EV startup announced it has taken in, or is about to take in, more than $1.
Companies that utilize artificial intelligence can dominate the business world and achieve long-lasting success. These three AI stocks are great buys right now.
The outlook isn’t pretty. Prepare your portfolio.
Carnival's (CCL) fiscal fourth-quarter performance is likely to have benefited from the resumption of cruise services, improved booking trends and fleet optimization efforts.
When it comes to passive income, not all that glitters is gold. The temptation of a high dividend yield promises investors strong returns, but the reality is often that lower-yielding stocks can pay out far more sustainably. The healthcare giant Abbott Laboratories (NYSE: ABT) is forever a river of opportunity for passive income investors thanks to its stability and consistent growth over time.
Cathie Wood went shopping on Friday. The co-founder, CEO, and stock-picking mastermind of Ark Invest hasn't been an active buyer for her funds in recent weeks, but she made several additions to existing positions as the trading week came to a close. Roku (NASDAQ: ROKU), Block (NYSE: SQ), and Zoom Video (NASDAQ: ZM) are three of the more interesting stocks that Wood bought on Friday.
The semiconductor space has contracted over the past year. In this article, we will dissect which semi conductors are leading and which are lagging.
In December of 2021, crypto exchange Coinbase Global (COIN) was about to cap a banner year: it had gone public with a valuation north of $85 billion and a $328 share price, raised over $3 billion through corporate bond offerings, and would ultimately take in $7.8 billion in annual revenue. Coinbase stock dropped 9.1% last week, only to fall to a new all-time low of $34.51 on Monday, before closing at $35.17. As it’s attempted to weather the crypto winter, Coinbase has been careful to distance itself from the likes of FTX and other crypto companies that have imploded recently, pointing to its identity as a Nasdaq-listed public company with audited financial statements.
Shares of AT&T (NYSE: T) were pulling back today on a down day in the market and after MoffettNathanson downgraded the stock this morning. AT&T shares were down 4.1% as of 2:19 p.m. ET. Research firm MoffettNathanson lowered its rating on AT&T from market perform to underperform this morning for mostly valuation-based reasons.
Microsoft stock is back under pressure as the market is selling off. Here's where to look for support.
Stocks saw out the week on the backfoot once again. Initially buoyed at the start of the week by the better-than-expected inflation data, come Wednesday and the Fed signaling rates are set to go higher until it is clear inflation has been tamed, the mood soured again, shifting back to the bearish trends on offer most of the year. So, these are uncertain times. Volatility is the ruling force in the markets, and investors are looking for some signal that will indicate just which stocks are attract
Yahoo Finance Live examines Tesla shares amid analyst downgrades and investor concerns linked to Elon Musk's new focus on Twitter, while also discussing Senator Elizabeth Warren's own qualms with the CEO's ownership of the social media platform.