Berkshire Hathaway Inc.
BRK-B
$511.54
+0.36%
Berkshire Hathaway Inc. is a global conglomerate headquartered in Omaha, Nebraska, with core operations spanning insurance, freight rail transportation, and utility services, alongside a diverse portfolio of manufacturing, retail, and service businesses. As a holding company led by Warren Buffett, it is widely regarded as a bellwether for the U.S. economy and a benchmark for value-oriented investing. The current investor narrative centers on the company's ability to deploy its massive cash hoard into accretive acquisitions, the resilience of its insurance and railroad earnings amid macroeconomic uncertainty, and the gradual leadership transition following Buffett's eventual departure.…
BRK-B
Berkshire Hathaway Inc.
$511.54
Investment Opinion: Should I buy BRK-B Today?
Rating: Hold. Berkshire Hathaway is a high-quality conglomerate with a fortress balance sheet and diversified earnings, but the current valuation offers limited upside. The analyst consensus is 'none' due to limited coverage, but the average target price of $520.33 implies +5.1% upside from $494.93, suggesting a modestly bullish outlook.
Supporting Evidence: The trailing P/E of 16.19x is reasonable but not cheap, while the forward P/E of 23.01x suggests earnings headwinds. Revenue growth of 4.4% YoY is steady but unexciting. The company generates strong free cash flow ($23.872 billion TTM) and has a low debt-to-equity ratio of 0.194. However, the net margin of 10.8% in Q1 2026 is below the TTM average, and the ROE of 9.33% is solid but not exceptional. The stock's beta of 0.607 makes it a defensive holding, but the 1-year relative strength of -13.49% versus the S&P 500 indicates underperformance.
Risks & Conditions: The biggest risks are earnings volatility from investments, limited analyst coverage, and the lack of a dividend. This Hold would upgrade to Buy if the stock pulls back to the 52-week low of $455.19 (P/E ~14.9x) or if the company announces a large accretive acquisition. It would downgrade to Sell if revenue growth turns negative or if the forward P/E expands above 25x without corresponding earnings growth. Overall, the stock appears fairly valued relative to its history and peers, with modest upside potential.
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BRK-B 12-Month Price Forecast
Berkshire Hathaway is a high-quality, defensive conglomerate with a strong balance sheet and consistent cash flow. However, the forward P/E of 23.01x suggests the market expects earnings to decline, creating a disconnect with the trailing valuation. The stock's low beta and diversified operations make it a suitable core holding, but the lack of near-term catalysts and limited analyst coverage warrant a neutral stance. A pullback to the 52-week low or a major acquisition would be reasons to become more bullish.
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 $525.33 and implied upside of +2.7% versus the current price.
Average Target
$525.33
0 analysts
Implied Upside
+2.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$481 - $585
Analyst target range
Only 3 analysts cover the stock, with a consensus recommendation of 'none' (likely due to limited coverage). The average target price is $520.33, implying approximately +5.1% upside from the current price of $494.93. The distribution leans bullish, with UBS consistently rating it a Buy across multiple dates. The target range spans from $481.00 (low) to $570.00 (high). The high target of $570.00 implies +15.2% upside and likely assumes continued operational strength and successful capital deployment, while the low target of $481.00 suggests a -2.8% downside, potentially pricing in macroeconomic headwinds or a slowdown in insurance underwriting. The narrow spread between low and high ($89) relative to the average indicates moderate conviction, but the limited analyst coverage means the stock may be less efficiently priced, offering opportunities for fundamental investors.
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Bulls vs Bears: BRK-B Investment Factors
Berkshire Hathaway presents a compelling risk/reward profile with a fortress balance sheet, consistent revenue growth, and strong free cash flow generation. The trailing P/E of 16.19x is attractive relative to its historical range, but the forward P/E of 23.01x signals caution on near-term earnings. The bull case is supported by the company's diversified operations and low beta of 0.607, while the bear case highlights earnings volatility from investments and limited analyst coverage. The single most important tension is whether Berkshire can deploy its massive cash hoard into accretive acquisitions to drive future earnings growth, which would justify the forward multiple. Currently, the evidence slightly favors the bull case due to the strong balance sheet and reasonable valuation.
Bullish
- Fortress Balance Sheet: Berkshire's debt-to-equity ratio is just 0.194 and current ratio is 6.75, indicating minimal leverage and ample liquidity. This provides a significant margin of safety and the ability to deploy capital during market downturns.
- Consistent Revenue Growth: Revenue grew 4.4% year-over-year in Q1 2026 to $93.675 billion, with trailing twelve-month revenue of approximately $376 billion. The diversified business model across insurance, rail, utilities, and manufacturing provides stable growth.
- Strong Free Cash Flow Generation: Trailing twelve-month free cash flow is $23.872 billion, providing substantial resources for acquisitions, share buybacks, or investment. This cash generation supports the company's ability to create shareholder value.
- Attractive Valuation vs. History: The trailing P/E of 16.19x is near the lower end of its historical range (4.2x to 62.5x), and the P/S ratio of 2.92x is well below the historical average of 9-11x. This suggests the stock is not overvalued relative to its own history.
Bearish
- Elevated Forward P/E: The forward P/E of 23.01x is significantly higher than the trailing P/E of 16.19x, implying the market expects earnings to decline. This gap suggests caution on near-term earnings power.
- Limited Analyst Coverage: Only 3 analysts cover the stock, with a consensus recommendation of 'none'. This lack of coverage may lead to less efficient pricing, but also indicates limited institutional interest and potential for mispricing.
- Earnings Volatility from Investments: Net income dropped from $19.199 billion in Q4 2025 to $10.106 billion in Q1 2026, primarily due to lower investment gains. This volatility can obscure underlying operating performance.
- No Dividend Yield: Berkshire does not pay a dividend, which may deter income-focused investors. The payout ratio is 0%, and the dividend yield is 0%, making it less attractive for those seeking current income.
BRK-B Technical Analysis
The stock is in a sustained uptrend over the past year, with a 1-year price change of +298.17%, significantly outperforming the S&P 500's +16.47%. Currently trading at $494.93, it sits at approximately 95.8% of its 52-week range ($455.19–$516.85), indicating the stock is near the upper end of its range and reflecting strong momentum but also potential overextension. Over the past 3 months, the stock has gained +5.46%, while the 1-month change is +2.43%, showing a deceleration in short-term momentum relative to the longer-term trend. The 1-month relative strength versus the S&P 500 is -0.76%, suggesting slight underperformance recently, but the 3-month relative strength is +1.96%, indicating medium-term outperformance. This divergence could signal a temporary pullback within a broader uptrend rather than a reversal. The 52-week low of $455.19 provides strong support, while the 52-week high of $516.85 acts as resistance. A breakout above $516.85 would signal renewed bullish momentum and potential for further gains, while a breakdown below $455.19 could indicate a trend reversal. With a beta of 0.607, the stock is significantly less volatile than the market, making it a defensive holding with lower risk.
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
+8.4%
Cumulative gain past year
| Period | BRK-B Return | S&P 500 |
|---|---|---|
| 1m | +2.4% | +0.2% |
| 3m | +8.1% | +3.7% |
| 6m | +6.5% | +8.0% |
| 1y | +8.4% | +18.2% |
| ytd | +3.0% | +9.6% |
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BRK-B Fundamental Analysis
Revenue has grown steadily, with the most recent quarter (Q1 2026) reporting $93.675 billion, up 4.4% year-over-year from $89.725 billion in Q1 2025. Over the past four quarters, revenue has ranged from $89.725 billion to $94.932 billion, indicating stable but moderate growth. Key revenue drivers include the Insurance Group ($25.312 billion), Manufacturing Businesses ($20.672 billion), and Pilot Travel Centers ($11.245 billion), while the BNSF railroad contributed $5.994 billion. The company is highly profitable, with net income of $10.106 billion in Q1 2026, though this was down from $19.199 billion in Q4 2025 due to lower investment gains. Gross margin improved to 28.8% in Q1 2026 from 23.0% in Q4 2025, while operating margin was 16.1%, reflecting strong operational efficiency. Net margin for Q1 2026 was 10.8%, below the trailing twelve-month average but still healthy. The balance sheet is fortress-like, with a debt-to-equity ratio of 0.194 and a current ratio of 6.75, indicating ample liquidity. Free cash flow for Q1 2026 was $5.452 billion, and the company generated $23.872 billion in free cash flow over the trailing twelve months. Return on equity (ROE) stands at 9.33%, while return on assets (ROA) is 5.39%, both solid for a conglomerate. The company has no dividend payout, preferring to reinvest capital.
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?
Since 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 23.01x, implying the market expects earnings growth to decelerate or that current earnings are temporarily elevated. The gap between trailing and forward P/E suggests a cautious outlook on near-term earnings. Compared to the industry average (not provided, but typically for diversified insurance, P/E ranges 10-15x), Berkshire's trailing P/E of 16.19x appears at a premium, likely justified by its superior diversification, strong balance sheet, and consistent cash flow generation. The price-to-book (P/B) ratio is 1.51x, which is reasonable for a company with a strong ROE. Historically, the trailing P/E has ranged from 4.2x (Q4 2021) to 62.5x (Q1 2025), with the current 16.19x near the lower end of the historical range, suggesting the stock is not overvalued relative to its own history. The P/S ratio of 2.92x is also below the historical average of around 9-11x, indicating potential value.
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 earnings are subject to volatility from its massive investment portfolio, as seen in Q1 2026 net income of $10.106 billion, down from $19.199 billion in Q4 2025. The company's operating margin of 16.1% is solid, but the net margin of 10.8% in Q1 2026 is below the trailing twelve-month average, indicating potential pressure. With a debt-to-equity ratio of 0.194, financial leverage is minimal, but the lack of dividend may signal limited confidence in sustainable earnings growth. The company's reliance on insurance underwriting and investment gains introduces cyclicality, and a prolonged soft market could pressure premiums and investment returns.
Market & Competitive Risks: Berkshire trades at a trailing P/E of 16.19x, which is a premium to the typical diversified insurance industry range of 10-15x, leaving it vulnerable to multiple compression if growth disappoints. The stock's beta of 0.607 provides downside protection, but its 1-year relative strength versus the S&P 500 is -13.49%, indicating underperformance that could persist if the market rotates away from value. Regulatory risks in insurance, railroad, and utility sectors could impact earnings, and the lack of analyst coverage (only 3 analysts) means the stock may be less efficiently priced, but also less followed by institutional investors.
Worst-Case Scenario: A severe recession could hit Berkshire's cyclical businesses (manufacturing, retail, railroad) and cause investment losses. The 52-week low of $455.19 represents a -8.0% downside from the current price of $494.93. In a worst-case scenario, earnings could decline significantly, and the stock could fall to the analyst low target of $481.00 (-2.8%) or below. Historically, the maximum drawdown is -14.95%, implying a potential decline to around $421. This scenario would require a combination of macroeconomic headwinds, poor capital allocation decisions, and a loss of investor confidence in the post-Buffett era.
FAQ
The key risks include: 1) Earnings volatility from the investment portfolio, as seen in Q1 2026 net income dropping to $10.106 billion from $19.199 billion in Q4 2025. 2) Limited analyst coverage (only 3 analysts) may lead to less efficient pricing and lower institutional interest. 3) Macroeconomic sensitivity, with a beta of 0.607 providing some protection but still exposed to recessions that could hurt cyclical businesses. 4) Leadership transition risk as Warren Buffett ages, though the company has a succession plan. The most severe risk is a recession causing a -14.95% drawdown, as seen historically.
The 12-month forecast includes three scenarios: a bull case (25% probability) with a target of $520-$570, driven by a major acquisition; a base case (55% probability) with a target of $481-$520, assuming steady growth; and a bear case (20% probability) with a target of $455-$481, if a recession hits. The most likely scenario is the base case, with the stock trading near the analyst average target of $520.33. Key assumptions include moderate economic growth and stable insurance underwriting. The AI assessment is neutral with medium confidence, reflecting the balanced risk/reward.
Berkshire Hathaway appears fairly valued based on its trailing P/E of 16.19x, which is near the lower end of its historical range of 4.2x to 62.5x. The P/S ratio of 2.92x is well below the historical average of 9-11x, suggesting potential value. However, the forward P/E of 23.01x indicates the market expects earnings to decline, creating a valuation disconnect. Compared to the diversified insurance industry (typical P/E 10-15x), Berkshire trades at a premium, likely justified by its superior diversification and cash flow. Overall, the stock is not overvalued relative to its own history, but the forward multiple warrants caution.
Berkshire Hathaway is a good stock to buy for long-term, risk-averse investors seeking a defensive holding with a strong balance sheet. The analyst average target of $520.33 implies +5.1% upside from the current price of $494.93, offering modest near-term potential. The trailing P/E of 16.19x is reasonable, but the forward P/E of 23.01x suggests caution on earnings. The biggest downside risk is a recession impacting cyclical businesses, which could push the stock to the 52-week low of $455.19 (-8.0%). For investors with a 3-5 year horizon, Berkshire's diversified operations and capital allocation discipline make it a solid buy, but those seeking quick gains may find better opportunities elsewhere.
Berkshire Hathaway is best suited for long-term investment due to its low beta of 0.607, diversified operations, and lack of dividend. The stock's volatility is lower than the market, making it a defensive holding that can weather downturns. Short-term traders may find limited upside near the 52-week high of $516.85, and the stock's 1-month relative strength of -0.76% suggests recent underperformance. A minimum holding period of 3-5 years is recommended to benefit from compounding and capital allocation. The company's focus on reinvesting earnings rather than paying dividends aligns with long-term value creation.
