Berkshire Hathaway Inc.
BRK-B
$490.91
-0.45%
Berkshire Hathaway Inc. is a global conglomerate operating primarily in insurance, freight rail transportation, and utility services, with additional interests in manufacturing, retail, and service businesses. As the holding company led by Warren Buffett, it is a market leader in insurance and a diversified investment vehicle, distinct for its massive scale, decentralized management, and substantial equity portfolio. The current investor narrative centers on the company's ability to generate consistent earnings growth amid a mixed economic environment, with attention on its insurance underwriting performance, capital allocation decisions, and the impact of interest rate changes on its investment income. Recent quarterly results showed a 4.4% revenue increase, but net income volatility due to investment gains/losses remains a key debate.…
BRK-B
Berkshire Hathaway Inc.
$490.91
Investment Opinion: Should I buy BRK-B Today?
Rating: Hold. Berkshire Hathaway is a high-quality conglomerate with a fortress balance sheet, but its decelerating growth and elevated forward P/E limit near-term upside. The analyst consensus is Buy with an average target of $520.33, implying 6.5% upside, but the stock's persistent underperformance warrants caution.
Supporting Evidence: The trailing P/E of 16.2x is below the 5-year average of ~20x, suggesting value. Revenue grew 4.4% YoY in Q1 2026, but the forward P/E of 22.7x prices in a decline. Free cash flow of $23.9B TTM is strong, and the debt-to-equity of 0.19 is minimal. The average analyst target of $520.33 provides a modest 6.5% upside, while the high target of $570 offers 16.7%.
Risks & Conditions: The Hold rating would upgrade to Buy if the forward P/E compresses below 18x or if revenue growth re-accelerates above 6%. It would downgrade to Sell if operating margins fall below 14% or if the stock breaks below the 52-week low of $455.19. Overall, BRK-B appears fairly valued relative to its history and peers, given its stable but slow-growth profile.
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BRK-B 12-Month Price Forecast
Berkshire Hathaway is a high-quality but slow-growth conglomerate facing valuation uncertainty. The trailing P/E of 16.2x is attractive, but the forward P/E of 22.7x signals expected earnings decline. The stock's persistent underperformance and decelerating revenue growth argue for a neutral stance. A bullish upgrade would require evidence of re-accelerating growth or a large accretive acquisition, while a bearish downgrade would follow a break below $455 or sustained margin compression.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Berkshire Hathaway Inc.'s 12-month outlook, with a consensus price target around $520.33 and implied upside of +6.0% versus the current price.
Average Target
$520.33
0 analysts
Implied Upside
+6.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$481 - $570
Analyst target range
Only 3 analysts cover Berkshire Hathaway, which is surprisingly low for a company of its size, likely due to its complex structure and the fact that many analysts focus on its individual holdings. The consensus recommendation is 'Buy' with a mean rating of 2.0 (on a scale where 1 is Strong Buy and 5 is Sell). The average target price is $520.33, implying approximately 6.5% upside from the current price of $488.35. The distribution leans bullish, with all three analysts rating it a Buy, and no Hold or Sell ratings. The target range spans from a low of $481.00 to a high of $570.00. The low target of $481 suggests a modest downside of about 1.5%, indicating that even the most bearish analyst sees limited risk. The high target of $570 implies a 16.7% upside, reflecting optimism about the company's long-term growth and capital allocation. The tight spread between low and high ($89) relative to the average suggests moderate uncertainty, but the unanimous Buy rating indicates strong conviction. Institutional ratings from UBS show consistent Buy ratings over the past two years, reinforcing positive sentiment. However, the limited coverage means the stock may have less efficient price discovery, and investors should conduct their own due diligence beyond analyst opinions.
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Bulls vs Bears: BRK-B Investment Factors
Berkshire Hathaway presents a mixed picture: its fortress balance sheet, strong cash flows, and low trailing P/E argue for value, while decelerating revenue growth, a high forward P/E, and persistent market underperformance raise caution. The bull case rests on the company's ability to deploy its $58.81 billion cash hoard wisely and sustain operating earnings, while the bear case centers on whether slowing growth and elevated forward multiples will cap returns. The single most important tension is whether Berkshire's operating businesses can generate enough earnings growth to justify the forward P/E of 22.7x, or if the market is correctly pricing in a normalization that will lead to multiple compression. Currently, the evidence slightly favors the bull case given the strong balance sheet and analyst consensus, but the underperformance warrants a cautious stance.
Bullish
- Fortress Balance Sheet: Berkshire has $58.81 billion in cash and a debt-to-equity ratio of just 0.19, providing immense financial flexibility for acquisitions, buybacks, and weathering downturns.
- Strong Free Cash Flow Generation: TTM free cash flow is $23.872 billion, supported by operating cash flow of $10.438 billion in Q1 2026 alone, easily covering capex of $4.986 billion.
- Attractive Trailing P/E vs History: The trailing P/E of 16.19x is near the lower end of its historical range (4.2x to 62.5x), suggesting the stock may be undervalued if earnings are sustainable.
- Unanimous Analyst Buy Rating: All 3 analysts rate BRK-B a Buy, with an average target of $520.33 implying 6.5% upside and a high target of $570 implying 16.7% upside.
Bearish
- Forward P/E Signals Earnings Decline: The forward P/E of 22.70x is significantly higher than the trailing 16.19x, implying the market expects earnings to fall, which could pressure the stock.
- Revenue Growth Decelerating: Q1 2026 revenue grew only 4.4% YoY, down from 5.5% in Q4 2025, indicating a slowing top-line trajectory across its diversified businesses.
- Underperformance vs S&P 500: BRK-B's 1-year return of +3.88% dramatically lags the S&P 500's +20.92%, with negative relative strength across all timeframes, suggesting persistent weakness.
- Earnings Volatility from Investments: Net income swung from $4.603 billion in Q1 2025 to $10.106 billion in Q1 2026, largely due to investment gains/losses, making reported earnings unreliable.
BRK-B Technical Analysis
Berkshire Hathaway is in a range-bound consolidation phase, with the 1-year price change of +3.88% significantly underperforming the S&P 500's +20.92% gain. The current price of $488.35 sits at 73% of its 52-week range ($455.19 to $516.85), indicating it is closer to the lower end of the range, which could suggest a value opportunity but also reflects relative weakness. The stock's beta of 0.607 implies it is less volatile than the market, which may appeal to risk-averse investors but also explains its lagging performance in a bull market. Short-term momentum is mixed: the 1-month change of -1.45% contrasts with the 3-month change of +2.78%, suggesting a recent pullback after a modest recovery. The 1-month relative strength of -2.05% versus the S&P 500 confirms underperformance, while the 3-month relative strength of -3.51% indicates a persistent trend of lagging. This divergence between short-term weakness and longer-term modest gains could signal a temporary pullback within a broader consolidation, but the lack of strong upward momentum raises caution. Key support is at the 52-week low of $455.19, a break below which could signal further downside and a potential trend reversal. Resistance is at the 52-week high of $516.85; a breakout above this level would indicate renewed strength and a possible uptrend. With a beta of 0.607, the stock is 39% less volatile than the S&P 500, meaning it offers relative stability but may also miss out on strong market rallies. The current price near the middle of the range suggests indecision, and traders should watch for a decisive move above $500 or below $470 for directional cues.
Beta
0.61
0.61x market volatility
Max Drawdown
-14.9%
Largest decline past year
52-Week Range
$455-$517
Price range past year
Annual Return
+3.7%
Cumulative gain past year
| Period | BRK-B Return | S&P 500 |
|---|---|---|
| 1m | -0.1% | +0.3% |
| 3m | +3.4% | +4.7% |
| 6m | -0.5% | +7.5% |
| 1y | +3.7% | +18.4% |
| ytd | -1.2% | +9.0% |
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BRK-B Fundamental Analysis
Revenue has shown steady growth, with the most recent quarter (Q1 2026) reporting $93.675 billion, up 4.4% year-over-year from $89.725 billion in Q1 2025. However, the growth rate has decelerated from the 5.5% YoY growth seen in Q4 2025 ($94.232 billion vs. $94.916 billion in Q4 2024). The revenue trajectory is positive but moderating, driven by diverse segments: insurance premiums ($25.3B), manufacturing ($20.7B), and retail/service ($10.9B) are key contributors, while the energy and railroad segments provide stable cash flows. The deceleration suggests that while the core businesses are growing, the pace is slowing, which may temper expectations for rapid expansion. Profitability is robust but variable: net income in Q1 2026 was $10.106 billion, a significant increase from $4.603 billion in Q1 2025, but this is heavily influenced by investment gains. Gross margin improved to 28.8% from 22.7% a year ago, indicating better cost management or mix shift. However, net margin of 10.8% is lower than the 20.4% in Q4 2025, reflecting the volatility of investment income. Operating margin of 16.1% is healthy and consistent with historical levels, suggesting the underlying businesses are efficiently run. The balance sheet is fortress-like: debt-to-equity is a low 0.19, and the current ratio of 6.75 indicates ample liquidity. Free cash flow (TTM) of $23.872 billion is strong, providing significant flexibility for acquisitions or buybacks. ROE of 9.3% is decent but not exceptional, reflecting the company's massive equity base. The company generates substantial cash from operations ($10.438 billion in Q1 2026), easily covering capital expenditures of $4.986 billion, and has $58.81 billion in cash at period end, underscoring its financial strength and ability to weather downturns.
Quarterly Revenue
$93.7B
2026-03
Revenue YoY Growth
+4.4%
YoY Comparison
Gross Margin
28.8%
Latest Quarter
Free Cash Flow
$23.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BRK-B Overvalued?
Given that net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 16.19x, while the forward P/E is 22.70x, implying the market expects earnings to decline or that current earnings are temporarily elevated. The gap between trailing and forward P/E suggests caution, as the forward multiple is higher, indicating that the market is pricing in lower future earnings. Compared to the industry average (not provided, but insurance diversified typically trades around 12-15x), Berkshire's trailing P/E of 16.19x appears slightly above average, but the forward P/E of 22.70x is a premium, which may be justified by its diversified earnings stream and strong balance sheet. The P/B ratio of 1.51x is reasonable for a financial conglomerate, and the P/S of 2.92x is low relative to historical levels, suggesting the stock is not overvalued on a sales basis. Historically, Berkshire's trailing P/E has ranged from as low as 4.2x (Q4 2021) to as high as 62.5x (Q1 2025) due to earnings volatility. The current 16.19x is near the lower end of its historical range, which could indicate a value opportunity if earnings are sustainable. However, the forward P/E of 22.70x suggests the market expects normalization, so investors should assess whether current earnings power is durable. The PEG ratio is negative (-0.65) due to negative earnings growth expectations, which is a red flag but may be distorted by one-time items.
PE
16.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 4x~35x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Berkshire's net income is highly volatile due to investment gains/losses, as seen in the swing from $4.6B in Q1 2025 to $10.1B in Q1 2026. This makes reported earnings an unreliable gauge of underlying performance. Additionally, revenue growth is decelerating (4.4% YoY in Q1 2026 vs 5.5% in Q4 2025), which could pressure margins if cost inflation persists. The forward P/E of 22.7x implies the market expects lower earnings, creating a risk of multiple compression if operating results disappoint. However, the low debt-to-equity of 0.19 and $58.8B cash provide a substantial buffer against financial distress.
Market & Competitive Risks: Berkshire's beta of 0.607 indicates low market correlation, but its 1-year relative strength of -17% vs the S&P 500 shows persistent underperformance. This could lead to further capital rotation away from value-oriented stocks if growth continues to dominate. The company faces competitive pressure in insurance from peers like Progressive and Allstate, and in railroads from Union Pacific. Regulatory risks include potential changes to insurance reserve requirements or railroad safety rules. The limited analyst coverage (only 3 analysts) may result in less efficient price discovery and higher information asymmetry.
Worst-Case Scenario: A severe recession could simultaneously hit Berkshire's insurance underwriting (catastrophe losses), railroad volumes, and manufacturing demand, while investment portfolio losses compound the earnings decline. In such a scenario, the stock could fall to its 52-week low of $455.19, representing a -6.8% decline from the current price of $488.35. If earnings drop to the analyst low estimate of $20.92, the trailing P/E at $455 would be 21.8x, still above historical lows, suggesting further downside possible to $400 (-18%) if multiples contract to 15x.
FAQ
The key risks include: 1) Earnings volatility from investment gains/losses, as seen in the swing from $4.6B net income in Q1 2025 to $10.1B in Q1 2026, making reported earnings unreliable. 2) Decelerating revenue growth, with Q1 2026 growth of 4.4% YoY down from 5.5% in Q4 2025, which could pressure margins. 3) Market underperformance, with 1-year relative strength of -17% vs the S&P 500, potentially leading to further capital rotation away from value stocks. 4) Limited analyst coverage (only 3 analysts) may result in less efficient price discovery. The most severe risk is a recession hitting multiple segments simultaneously, which could push the stock to the 52-week low of $455.19 or lower.
The 12-month forecast is mixed. The base case (55% probability) expects the stock to trade in a range of $480-$520, with gradual appreciation toward the analyst average target of $520.33. The bull case (25% probability) sees the stock reaching $520-$570, driven by a large acquisition or strong earnings growth. The bear case (20% probability) projects a decline to $455-$480, if a recession or earnings disappointment triggers multiple compression. The most likely scenario is the base case, assuming moderate economic growth and steady operating performance. The forward P/E of 22.7x is a key risk, as it implies the market expects earnings to decline, which could cap upside.
BRK-B appears fairly valued based on its trailing P/E of 16.2x, which is near the lower end of its historical range (4.2x to 62.5x). However, the forward P/E of 22.7x is elevated, implying the market expects lower future earnings. Compared to the insurance-diversified industry average P/E of 12-15x, the trailing multiple is slightly above, but Berkshire's diversified earnings and strong balance sheet justify a premium. The P/B ratio of 1.51x is reasonable for a financial conglomerate. Overall, the stock is not overvalued on a trailing basis, but the forward multiple suggests caution. The market appears to be pricing in a normalization of earnings, making the stock fairly valued with limited margin of safety.
BRK-B is a good buy for conservative, long-term investors seeking a defensive holding with a strong balance sheet and diversified earnings. The analyst consensus is Buy with an average target of $520.33, implying 6.5% upside. However, the forward P/E of 22.7x suggests the market expects earnings to decline, which is a risk. The stock's 1-year return of +3.88% lags the S&P 500 significantly, so it may not suit growth-oriented investors. For value investors, the trailing P/E of 16.2x is reasonable, but the lack of near-term catalysts limits upside. Overall, it is a hold for existing shareholders and a cautious buy for new investors at current levels, with a preference for accumulating on dips below $470.
BRK-B is best suited for long-term investment, given its low beta of 0.607, stable cash flows, and conservative management. The stock's 1-year return of +3.88% and range-bound price action make it unattractive for short-term trading. The company does not pay a dividend, so income-focused investors should look elsewhere. For long-term holders, the fortress balance sheet and diversified earnings provide downside protection, while the potential for capital appreciation through acquisitions or buybacks offers upside. A minimum holding period of 3-5 years is recommended to allow the compounding effect of earnings growth and capital allocation to materialize. Short-term traders may find better opportunities in more volatile names.
