Berkshire Hathaway Inc.
BRK-B
$526.85
+1.11%
Berkshire Hathaway Inc. is a vast global conglomerate whose core operations span insurance and reinsurance (property, casualty, life, accident and health), freight rail transportation through Burlington Northern Santa Fe, utility and energy generation and distribution through Berkshire Hathaway Energy, and a sprawling manufacturing, service and retail portfolio that ranges from specialty chemicals and aerospace components to confectionery, footwear and quick-service restaurant franchising. The company is best understood not as a single operating business but as a decentralized holding company and capital allocator, distinguished by its enormous insurance float, its massive equity investment portfolio, and a balance sheet that has historically functioned as a source of strength in dislocated markets. The current investor narrative centers on the post-Buffett succession era and whether Greg Abel can sustain the conglomerate's capital-allocation discipline, alongside the deployment of a record cash pile that has been building as the company has been a net seller of equities. Attention is also focused on the earnings power of the wholly owned operating businesses, where insurance underwriting results and BNSF rail volumes have been uneven, and on the stock's notable underperformance versus the S&P 500 over the past year, which has reignited the debate over whether Berkshire's defensive, low-beta profile is a feature or a drag in a momentum-driven market.…
BRK-B
Berkshire Hathaway Inc.
$526.85
Investment Opinion: Should I buy BRK-B Today?
Based on the synthesis of analyst consensus, valuation, and growth prospects, the recommendation is Hold. The core thesis is that Berkshire offers a defensive, high-quality balance sheet and steady earnings, but its low beta and value orientation have led to significant underperformance versus the S&P 500, and near-term catalysts are lacking. The analyst consensus rating of 'buy' with an average target of $547.67 implies only 6.3% upside, which is modest relative to the risk-free rate and the stock's recent volatility.
Supporting evidence includes: 1) Revenue growth of 10.04% YoY in Q2 2026, driven by insurance and manufacturing; 2) Net margin expansion to 25.21% in Q2 2026 from 13.37% a year ago; 3) Strong free cash flow of $24.22B TTM and a cash-rich balance sheet with $41.36B in cash; 4) Attractive valuation with a trailing PE of 16.21x and price-to-book of 1.51x, below many financial peers. However, the forward PE of 23.80x suggests earnings normalization, and the PEG ratio is not meaningful due to investment gains. The stock's 1-year return of 3.80% lags the S&P 500's 16.00%, and its beta of 0.595 means it will likely continue to underperform in strong bull markets.
The biggest risks that could invalidate the thesis include: 1) A prolonged period of underperformance if growth stocks continue to lead; 2) A significant decline in investment portfolio value due to market corrections; 3) Failure to deploy the cash pile accretively, leading to a valuation de-rating. The rating would upgrade to Buy if the stock breaks above the 52-week high of $537.74 on a large acquisition or accelerated buybacks, or if price-to-book compresses below 1.4x. It would downgrade to Sell if revenue growth decelerates below 5% or if insurance underwriting results deteriorate significantly. Relative to its history and peers, the stock appears fairly valued, with a slight premium on book value but a discount on earnings.
Sign up to view all
BRK-B 12-Month Price Forecast
Berkshire Hathaway presents a balanced risk-reward profile, with a fortress balance sheet and steady earnings offset by low growth and market underperformance. The stock's valuation is fair, with a trailing PE of 16.21x and price-to-book of 1.51x, but the forward PE of 23.80x suggests that earnings may normalize lower. Analyst sentiment is mildly positive but with limited coverage and a modest upside to the average target. The company's low beta makes it a defensive holding, but it will likely continue to lag in momentum-driven markets. I would upgrade to bullish if Berkshire announces a large accretive acquisition or significantly accelerates buybacks, and downgrade to bearish if revenue growth stalls or insurance underwriting deteriorates.
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 $547.67 and implied upside of +4.0% versus the current price.
Average Target
$547.67
0 analysts
Implied Upside
+4.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$510 - $604
Analyst target range
Analyst coverage of Berkshire Hathaway is thin relative to its $1.09 trillion market capitalization, with only 3 analysts contributing to the consensus, which is itself a notable signal about the stock's institutional following. The consensus recommendation is "buy" with a recommendation mean of 2.0, and the average target price of $547.67 implies roughly +6.3% upside from the current price of $515.44. The distribution leans bullish in direction but the small sample size means the consensus carries less statistical weight than it would for a mega-cap technology name with 30+ covering analysts. The estimated EPS average of $22.71 (range $22.18 to $23.23) and estimated revenue average of $421.63 billion (range $414.13 billion to $429.14 billion) frame the fundamental expectations underpinning those targets.
The target range spans from a low of $510.00 to a high of $604.00, a spread of $94.00, or roughly 18.4% of the current price — a moderately wide dispersion that signals genuine disagreement about the pace of earnings normalization and capital deployment. The high target of $604.00 implies roughly +17.2% upside and would require either multiple expansion on the price-to-book metric toward 1.7x–1.8x, a large accretive acquisition that puts the cash pile to work, or a sustained improvement in insurance underwriting and BNSF volumes. The low target of $510.00, just 1.1% below the current price, essentially prices in a flat-to-modest outcome where earnings normalize without a re-rating and the stock continues to lag the broader market. Institutional ratings data shows UBS reiterating a Buy rating consistently from February 2025 through August 2026 with no downgrades or upgrades in the series, indicating stable but unenthusiastic institutional conviction. The combination of minimal coverage, a tight consensus around "buy," and a wide target range suggests Berkshire is a stock owned for its balance-sheet safety and optionality rather than for analyst-driven momentum, and the limited coverage means price discovery is driven more by macro flows and index positioning than by sell-side catalysts.
Drowning in data?
Find the real signal!
Bulls vs Bears: BRK-B Investment Factors
The bull case rests on Berkshire's exceptional balance sheet (debt-to-equity 0.194, current ratio 6.75), improving profitability (Q2 2026 net margin 25.21%), and attractive valuation (trailing PE 16.21x, PB 1.51x) with analyst upside to $547.67. However, the bear case highlights persistent market underperformance (-12.20% relative strength over 1 year), low beta (0.595) that limits upside in bull markets, and earnings volatility from investment gains. Currently, the bear evidence appears stronger given the stock's significant lag versus the S&P 500 and the lack of near-term catalysts. The most critical tension is whether Berkshire's massive cash pile and defensive posture will be deployed accretively (e.g., large acquisition or accelerated buybacks) to reignite growth, or whether the conglomerate will continue to lag in a momentum-driven market.
Bullish
- Fortress Balance Sheet: Debt-to-equity of 0.194 and a current ratio of 6.75 provide exceptional financial flexibility. Interest coverage of ~13.1x on Q2 2026 interest expense of $1.335B underscores the company's ability to weather economic downturns and deploy capital opportunistically.
- Improving Profitability: Q2 2026 net income surged to $25.67B (25.21% net margin) from $12.37B (13.37% margin) in Q2 2025, driven by higher insurance underwriting and investment gains. Operating margin also expanded to 17.18% from 13.78% in Q4 2025.
- Steady Revenue Growth: Q2 2026 revenue grew 10.04% YoY to $101.81B, with sequential increases from $93.68B in Q1 2026 and $94.23B in Q4 2025. Diversified segments (insurance, manufacturing, energy, rail) provide resilience.
- Attractive Valuation vs. Peers: Trailing PE of 16.21x is below the S&P 500's typical low-20s multiple, and price-to-book of 1.51x is a discount to many large-cap financials trading at 1.8x–2.5x book. This suggests the market is not pricing in aggressive growth.
Bearish
- Significant Market Underperformance: BRK-B has gained only 3.80% over the past year versus the S&P 500's 16.00%, resulting in a relative strength of -12.20%. This underperformance may persist if momentum-driven markets favor growth stocks.
- Low Beta Limits Upside: With a beta of 0.595, Berkshire is ~40% less volatile than the market. While this cushions downside, it structurally lags in strong risk-on rallies, as evidenced by the 1-year relative strength of -12.20%.
- Earnings Volatility from Investments: Net income is heavily influenced by investment gains/losses: Q2 2026 included $14.57B in other income, while Q1 2026 had a -$3.06B hit. This makes GAAP earnings unpredictable and can distort valuation metrics like the trailing PE of 16.21x.
- Premium Price-to-Book: The price-to-book ratio of 1.51x is near the upper end of its recent range (1.42x–1.51x) and above the 1.0x level that historically marked deep value. This limits multiple expansion potential without a catalyst.
BRK-B Technical Analysis
Berkshire Hathaway's Class B shares are in a slow, grinding uptrend that has nonetheless lagged the broader market badly, with a 1-year price change of just 3.80% versus the S&P 500's 16.00%, producing a relative strength of -12.20% over that period. At the current price of $515.44, the stock sits at roughly 68.7% of its 52-week range of $464.01 to $537.74, meaning it is in the upper-middle portion of its band but still about 4.1% below the 52-week high. That positioning suggests a stock with positive but unspectacular momentum — not overextended enough to signal a crowded trade, but not near the lows where deep value buyers typically engage, leaving it in a neutral-to-constructive technical posture. The 6-month gain of 7.44% and year-to-date gain of 3.78% confirm a steady climb, though the stock has given back relative ground to the index throughout the year.
Short-term momentum has been modestly positive but is diverging from the longer-term picture in an important way: the 1-month change of 1.76% and 3-month change of 4.44% show the stock re-accelerating slightly off its late-September dip toward $497.95, yet the 1-month relative strength of -0.36% means it is still trailing the S&P 500's 2.12% monthly gain. The 3-month relative strength of +1.31% is the one bright spot, indicating Berkshire has modestly outperformed the index over that window even as it has lagged over 6 months (-7.15%) and 12 months (-12.20%). This pattern — short-term stabilization against a backdrop of longer-term underperformance — is characteristic of a defensive value name catching a bid during periods of market rotation rather than a genuine trend reversal. Volume of roughly 4.3 million shares and a short ratio of 3.16 days suggest no meaningful short-side pressure or capitulation dynamic at work.
Key technical levels are well defined: support rests at the 52-week low of $464.01, roughly 10.0% below the current price, while resistance sits at the 52-week high of $537.74, about 4.3% above. A breakout above $537.74 would likely require either a broad rotation into value/defensives or a company-specific catalyst such as a large acquisition or accelerated buyback, and would signal that the market is finally re-rating the cash pile and earnings base. Conversely, a breakdown below $464.01 would confirm the underperformance trend and could open a deeper drawdown, particularly given the maximum drawdown of -14.95% already experienced over the past year. The beta of 0.595 is the critical risk-management input here: Berkshire is roughly 40% less volatile than the S&P 500, meaning it offers downside cushion but will structurally lag in strong risk-on rallies — a profile suited to capital preservation and income-equivalent stability rather than aggressive growth positioning.
Beta
0.59
0.59x market volatility
Max Drawdown
-14.9%
Largest decline past year
52-Week Range
$464-$538
Price range past year
Annual Return
+6.1%
Cumulative gain past year
| Period | BRK-B Return | S&P 500 |
|---|---|---|
| 1m | +2.2% | +1.1% |
| 3m | +6.7% | +2.5% |
| 6m | +10.9% | +8.4% |
| 1y | +6.1% | +16.2% |
| ytd | +5.9% | +12.9% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
BRK-B Fundamental Analysis
Berkshire's revenue trajectory is steady and modestly improving, with Q2 2026 revenue of $101.81 billion representing 10.04% year-over-year growth against Q2 2025's $92.52 billion, and the sequential trend from Q1 2026's $93.68 billion and Q4 2025's $94.23 billion shows a clear upward slope. The segment mix reveals the conglomerate's balance: insurance generated $26.18 billion, manufacturing $22.57 billion, Pilot Travel Centers $14.93 billion, McLane $12.12 billion, service and retailing $11.88 billion, BNSF $6.60 billion, and Berkshire Hathaway Energy $6.74 billion, meaning no single segment dominates and the insurance and manufacturing arms are the largest contributors. Growth is being driven primarily by the insurance and manufacturing complexes, while the rail and energy segments remain the more cyclical, capital-intensive drags on consolidated growth. For investors, this diversification means Berkshire's top line is far less volatile than a pure-play insurer or industrial, but it also caps the growth rate — a low-single-to-low-double-digit trajectory is the realistic baseline absent a major acquisition.
Profitability is robust and, importantly, improving: Q2 2026 net income reached $25.67 billion on a net margin of 25.21%, up sharply from Q1 2026's $10.11 billion and 10.79% margin, and well above Q2 2025's $12.37 billion and 13.37% margin. Gross margin has been remarkably stable in the 23.0%–23.4% range across the last four quarters (23.37% in Q2 2026, 23.06% in Q1 2026, 23.01% in Q4 2025, 24.62% in Q3 2025), while the operating margin of 17.18% in Q2 2026 compares favorably to 16.41% in Q1 2026 and 13.78% in Q4 2025. The volatility in net income is largely a function of investment gains and losses flowing through the income statement — Q2 2026 benefited from $14.57 billion of total other income versus a -$3.06 billion hit in Q1 2026 — which is why operating earnings, not GAAP net income, are the more meaningful gauge of the underlying business. The trailing net margin of 18.03% and operating margin of 15.85% are healthy for a diversified financial-industrial conglomerate, reflecting the high-margin insurance underwriting and the steady cash generation of the operating subsidiaries.
The balance sheet is exceptionally strong and is the cornerstone of the investment case: debt-to-equity stands at just 0.194, the current ratio is a towering 6.75, and interest coverage of roughly 13.1x on the most recent quarterly data provides enormous cushion. Free cash flow on a trailing-twelve-month basis is $24.22 billion, though quarterly FCF has been lumpy ($5.57 billion in Q2 2026, $5.45 billion in Q1 2026, $4.99 billion in Q4 2025), and the company ended Q2 2026 with $41.36 billion of cash on the balance sheet after deploying $172.28 billion into investment purchases and $5.65 billion into capital expenditures during the quarter. ROE of 9.33% and ROA of 6.01% are respectable but not spectacular, reflecting the drag of a very large low-yielding cash and fixed-income portfolio; the payout ratio and dividend yield are both zero, as Berkshire has never paid a dividend and instead retains all earnings for reinvestment and buybacks. The company repurchased $4.21 billion of stock in Q2 2026, a signal that management views the shares as reasonably valued, and the absence of any dividend obligation means capital allocation flexibility remains a genuine competitive advantage.
Quarterly Revenue
$101.8B
2026-06
Revenue YoY Growth
+10.0%
YoY Comparison
Gross Margin
23.4%
Latest Quarter
Free Cash Flow
$24.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is BRK-B Overvalued?
Because Berkshire's net income is solidly positive ($25.67 billion in Q2 2026 alone), the PE ratio is the appropriate primary metric, and the trailing PE of 16.21x is the headline figure to anchor on. The forward PE of 23.80x is meaningfully higher than the trailing multiple, which at first glance seems counterintuitive, but it reflects the fact that trailing earnings include large realized and unrealized investment gains that analysts do not expect to repeat at the same magnitude — consensus EPS estimates of $22.71 for the forward period imply a lower earnings base than the trailing GAAP figure. The gap between trailing and forward PE therefore signals that the market is not pricing in aggressive earnings growth; rather, it is capitalizing a normalized earnings stream, and the PEG ratio of -0.65 is not meaningful given the distortion from investment gains. The price-to-book ratio of 1.51x is arguably the more relevant valuation lens for Berkshire, and it sits comfortably above the 1.0x level that has historically marked deep value but well below the 1.7x–1.8x peaks seen in 2025.
Relative to the broader financial services and diversified insurance sector, Berkshire trades at a premium on price-to-book (1.51x) but a discount on price-to-sales (2.92x) and price-to-cash-flow (23.61x), reflecting the conglomerate's lower-margin, capital-intensive revenue base compared with pure-play insurers. The EV/EBITDA of 16.20x is a reasonable multiple for a business with Berkshire's earnings quality and balance-sheet strength, though the negative EV/Sales figure of -0.61 is a data artifact driven by the enormous investment and cash balances netted against enterprise value and should not be read as a meaningful signal. On a price-to-book basis, Berkshire's 1.51x compares favorably to many large-cap financials trading at 1.8x–2.5x book, suggesting the market is not awarding the conglomerate a premium for its diversification or its cash hoard — if anything, the discount implies skepticism about capital deployment and succession. The 16.21x trailing PE is also below the S&P 500's typical low-20s multiple, consistent with Berkshire's historical pattern of trading at a market discount due to its size, complexity, and lower growth rate.
Historical context is instructive: Berkshire's PE ratio has ranged from roughly 4.2x in Q4 2021 (a period of massive investment gains) to 62.4x in Q1 2025 (a period of depressed earnings), with the current 16.21x sitting near the middle of that wide band and close to the Q4 2025 reading of 14.14x and Q2 2026 reading of 10.48x. The price-to-book ratio of 1.51x is near the upper end of its recent range — it was 1.43x in Q2 2026, 1.42x in Q1 2026, and 1.51x in Q4 2025 — but still below the 1.75x seen in Q1 2025 and the 1.57x–1.60x levels of mid-2024. This suggests the stock is not cheap on a book-value basis relative to its own recent history, but it is also not at the euphoric levels that would signal a crowded, overvalued trade. The market appears to be pricing Berkshire at a modest premium to book that reflects the quality of its operating businesses and the optionality of its cash, but without embedding heroic assumptions about growth or capital deployment.
PE
16.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 4x~26x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
16.2x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are relatively contained given Berkshire's fortress balance sheet, but not negligible. The debt-to-equity ratio of 0.194 and interest coverage of ~13.1x provide substantial cushion, yet the company's earnings are heavily influenced by investment gains/losses, as seen in Q2 2026's $14.57B other income versus Q1 2026's -$3.06B hit. This volatility can lead to unpredictable GAAP earnings and may obscure the performance of underlying operating businesses. Additionally, the insurance segment, which generated $26.18B in Q2 2026 revenue, is exposed to catastrophic events and reserve adjustments, while BNSF and energy segments face cyclical and regulatory pressures. The absence of a dividend (payout ratio 0) means total return depends entirely on price appreciation, which has lagged the market.
Market and competitive risks stem from Berkshire's low beta (0.595) and value-oriented profile, which have caused it to underperform the S&P 500 by 12.20% over the past year. In a momentum-driven market, this defensive posture may continue to be a drag. The stock trades at a premium price-to-book (1.51x) relative to its own history, limiting multiple expansion unless a catalyst emerges. Competitive threats include disruption in insurance (e.g., insurtech), rail (trucking competition), and retail (e-commerce), though Berkshire's diversification mitigates single-industry risk. Regulatory headwinds, such as climate-related disclosures and antitrust scrutiny, could increase compliance costs. Macro sensitivity is moderate given the low beta, but rising interest rates could pressure the valuation of the equity portfolio and increase borrowing costs.
The worst-case scenario would involve a severe global recession triggering credit losses in the insurance portfolio, a sharp decline in rail and energy volumes, and a significant drawdown in the equity investment portfolio. This could lead to a decline toward the 52-week low of $464.01, representing a 10.0% drop from the current price of $515.44. If the bear case fully materializes, the stock could fall to the analyst low target of $510.00 (only 1.1% downside) or lower if earnings disappoint. Historically, the maximum drawdown over the past year was -14.95%, suggesting that a 15% decline from current levels to ~$438 is possible in a severe market dislocation. Investors could lose 10-15% from the current price in such an adverse scenario.
FAQ
The key risks include: 1) Market underperformance risk, as the stock's low beta (0.595) and value orientation have led to a 12.20% relative underperformance versus the S&P 500 over the past year; 2) Earnings volatility from investment gains/losses, which can cause large swings in GAAP net income (e.g., Q2 2026 had $14.57B other income vs. Q1 2026's -$3.06B); 3) Capital allocation risk, as the company's large cash pile may not be deployed accretively, leading to a valuation de-rating; 4) Insurance underwriting risk, as the insurance segment (26.18B in Q2 2026 revenue) is exposed to catastrophic events and reserve adjustments. These risks are ranked from highest to lowest severity.
The 12-month forecast includes three scenarios: Bull case (25% probability) with a target range of $580–$604, driven by a major acquisition or accelerated buybacks; Base case (55% probability) with a target range of $530–$560, assuming steady growth and no major catalysts; Bear case (20% probability) with a target range of $464–$510, triggered by a recession or poor capital allocation. The base case is most likely, with the key assumption that Berkshire continues its disciplined but unspectacular growth trajectory. The analyst average target of $547.67 aligns with the base case.
BRK-B appears fairly valued to slightly undervalued relative to its own history and peers. The trailing PE of 16.21x is below the S&P 500's typical low-20s multiple, and the price-to-book ratio of 1.51x is a discount to many large-cap financials trading at 1.8x–2.5x book. However, the forward PE of 23.80x suggests that trailing earnings may have been inflated by investment gains, and the price-to-book is near the upper end of its recent range. The market is pricing in modest growth and no major capital deployment, implying that a re-rating would require a catalyst such as a large acquisition or accelerated buybacks.
BRK-B can be a good buy for conservative investors seeking a low-volatility, high-quality holding with a strong balance sheet. The stock trades at a trailing PE of 16.21x and price-to-book of 1.51x, which is reasonable but not deeply discounted. Analyst consensus is 'buy' with an average target of $547.67, implying 6.3% upside, but the stock has lagged the S&P 500 by 12.20% over the past year. The biggest downside risk is a continued underperformance in a momentum-driven market, with a potential 10% decline to the 52-week low of $464.01. Therefore, it is a good buy for those prioritizing stability over growth, but less appealing for investors seeking high returns.
BRK-B is more suitable for long-term investment due to its low beta (0.595), lack of dividend, and steady but slow growth. Short-term trading is less attractive given the stock's low volatility and limited catalysts. The company's strong balance sheet and diversified earnings provide downside protection, making it a good core holding for conservative portfolios. A minimum holding period of 3–5 years is recommended to allow for potential capital deployment and compounding of retained earnings. The stock's 1-year return of 3.80% and 6-month return of 7.44% suggest that patience is required, but the long-term track record of value creation remains intact.
