Berkshire Hathaway Inc.
BRK-B
$514.95
+0.90%
Berkshire Hathaway Inc. is a diversified global conglomerate whose core operations span insurance and reinsurance (property, casualty, life, accident and health), freight rail transportation through BNSF, and regulated utility and energy generation and distribution through Berkshire Hathaway Energy, complemented by a vast manufacturing, service, retailing and distribution portfolio that includes McLane, Pilot Travel Centers and numerous industrial and consumer brands. The company is best understood as a capital-allocation platform rather than a single operating business: its enormous insurance float, wholly owned subsidiaries and massive equity securities portfolio make it a distinct hybrid of operating conglomerate and closed-end investment vehicle, with few true comparables in public markets. The current investor narrative centers on the post-Buffett succession transition and whether Greg Abel's leadership can sustain the decentralized operating culture, alongside the persistent question of how Berkshire will deploy its record cash pile — roughly $58.8 billion at the most recent quarter end — amid elevated public-market valuations and a multi-year drought in large-scale acquisitions. Attention is also focused on insurance underwriting profitability after several quarters of elevated catastrophe activity, the earnings drag from a soft freight rail environment, and the growing weight of non-operating investment gains and losses that continue to distort reported net income and complicate the earnings quality debate.…
BRK-B
Berkshire Hathaway Inc.
$514.95
Investment Opinion: Should I buy BRK-B Today?
Rating: Hold. Berkshire offers a unique combination of defensive characteristics, a fortress balance sheet, and a modest valuation, but lacks a near-term catalyst to drive meaningful outperformance. The analyst consensus average target of $547.67 implies +7.3% upside, with a low target of $510 (at the current price) and a high of $604 (+18.3%), reflecting fair valuation with limited re-rating potential. The core thesis is that Berkshire is a low-beta compounder (beta 0.603) that will continue to lag in strong bull markets but provide downside protection, making it suitable for conservative investors seeking stability rather than growth.
Supporting evidence includes a trailing PE of 16.21x, which is below the 18-25x range typical for diversified financial peers, and a price-to-book of 1.51x that is modest for a company with Berkshire's asset quality. Revenue grew 4.4% year-over-year in Q1 2026 to $93.68 billion, while TTM free cash flow of $23.87 billion and a debt-to-equity of 0.194 underscore financial strength. Operating margin of 15.85% and net margin of 18.03% are healthy, though ROE of 9.33% is modest. The stock's 1-year return of +2.71% significantly trails the S&P 500's +16.22%, but its low beta and 6.75 current ratio provide a margin of safety.
Key risks that could invalidate the thesis include a prolonged inability to deploy the $58.81 billion cash pile accretively, which would cap upside, and a reversal of investment gains that could pressure reported earnings and the forward multiple. Additionally, a broad market rotation away from defensive value stocks could cause underperformance. The rating would upgrade to Buy if price-to-book compresses below 1.4x or if the company announces a major accretive acquisition or accelerated buybacks; it would downgrade to Sell if operating earnings decline meaningfully or if the stock breaks below the 52-week low of $464. Relative to its own history (price-to-book range 1.29x-1.76x) and peers, the stock appears fairly valued, with a slight premium to book justified by balance sheet strength but a discount on earnings due to investment-gain volatility.
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BRK-B 12-Month Price Forecast
Berkshire Hathaway presents a balanced risk/reward profile with a neutral stance. The stock is fairly valued, trading at 1.51x book and 16.21x trailing earnings, but the forward PE of 23.0x suggests the market expects earnings to decline from inflated levels. The company's low beta (0.603) and massive cash position ($58.81 billion) offer significant downside protection, but also limit upside potential in strong bull markets. Analyst sentiment is constructive but thin, with only 3 analysts and a wide target range. I would upgrade to bullish if Berkshire announces a large accretive acquisition or if price-to-book compresses below 1.4x, and downgrade to bearish if operating earnings decline meaningfully or if the stock breaks below the 52-week low of $464.
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 +6.3% versus the current price.
Average Target
$547.67
0 analysts
Implied Upside
+6.3%
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 $1.085 trillion market capitalization, with only 3 analysts contributing to the consensus. The average target price is $547.67, implying approximately +7.3% upside from the current price of $510.37, with a low target of $510.00 (essentially at the current price) and a high target of $604.00 (implying +18.3% upside). The consensus recommendation field is listed as "none," but the institutional ratings history shows UBS maintaining a Buy rating consistently from November 2024 through May 2026, indicating that the available coverage leans constructive even if the formal consensus label is unavailable. The modest implied upside and the fact that the low target sits exactly at the current price suggest analysts see the stock as fairly valued with limited near-term re-rating potential, consistent with the stock's low-beta, defensive profile. The target range of $510 to $604 is relatively wide — a spread of $94, or 18.4% of the current price — which signals meaningful disagreement about the company's earnings trajectory and capital deployment prospects. The high target of $604 likely assumes successful deployment of Berkshire's cash pile into accretive acquisitions, a recovery in BNSF freight volumes, and continued insurance underwriting profitability, while the low target of $510 implies a status quo scenario where earnings normalize lower and the market continues to apply a conglomerate discount. The estimated EPS average of $22.71 for the forward period, against a current price of $510.37, implies a forward earnings multiple of roughly 22.5x, which is elevated relative to the trailing 16.21x and suggests analysts expect reported earnings to decline from trailing levels — a key risk if investment gains reverse. With only 3 analysts and a single firm (UBS) providing the visible ratings history, price discovery is less efficient than for mega-cap peers, and the lack of recent upgrades or downgrades suggests a stable but low-conviction institutional view; investors should weight the wide target spread as a signal of genuine uncertainty rather than strong conviction in either direction.
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Bulls vs Bears: BRK-B Investment Factors
The bear case currently has slightly stronger evidence due to the stock's significant underperformance versus the S&P 500 (-13.51 relative strength over 1 year), the unusual forward PE (23.0x) exceeding trailing PE (16.21x) which signals expected earnings decline, and the lack of a clear catalyst for multiple expansion. However, the bull case rests on a fortress balance sheet (debt-to-equity 0.194), consistent free cash flow ($23.87 billion TTM), and a low beta (0.603) that provides defensive appeal. The single most important tension is whether Berkshire can deploy its $58.81 billion cash pile into accretive acquisitions or large buybacks; success would likely re-rate the stock toward the high analyst target of $604, while continued inactivity could leave it range-bound near the $510 low target. Valuation is fair but not distressed, with price-to-book at 1.51x sitting mid-to-upper in its historical band, suggesting limited margin of safety. Overall, the risk/reward is balanced but tilted slightly negative for near-term outperformance, making it a hold for most investors.
Bullish
- Fortress balance sheet with minimal leverage: Debt-to-equity of just 0.194 and a current ratio of 6.75 provide enormous financial flexibility and virtually eliminate solvency risk. With $58.81 billion in cash at Q1 2026 quarter-end, Berkshire can fund operations, acquisitions, and buybacks internally without relying on external financing.
- Consistent free cash flow generation: TTM free cash flow of $23.87 billion and Q1 2026 operating cash flow of $10.44 billion comfortably cover capital expenditure of $4.99 billion. This cash-generative engine supports ongoing acquisitions ($9.69 billion deployed in Q1 2026) and potential shareholder returns.
- Attractive valuation versus peers: Trailing PE of 16.21x screens cheap against diversified financial peers often trading at 18-25x, while price-to-book of 1.51x is modest for a company with Berkshire's asset quality. EV/EBITDA of 16.20x is reasonable given 15.85% operating margins.
- Low beta defensive compounder: Beta of 0.603 means Berkshire is roughly 40% less volatile than the market, offering downside protection during selloffs. The stock has delivered positive returns over 1-month (+0.07%), 3-month (+4.32%), and 6-month (+4.15%) periods, showing steady accumulation.
Bearish
- Earnings quality distorted by investment swings: Q1 2026 net income of $10.11 billion (10.79% margin) fell sharply from Q4 2025's $19.20 billion (20.37% margin) and Q3 2025's $30.80 billion (32.43% margin), driven by mark-to-market investment losses. EPS swung from $14.28 in Q3 2025 to $4.68 in Q1 2026, making reported earnings unreliable.
- Forward PE exceeds trailing PE: Forward PE of 23.0x is higher than trailing PE of 16.21x, implying the market expects earnings to decline. This inversion reflects the non-repeatability of large investment gains that inflated trailing earnings, and suggests the stock is not as cheap as the trailing multiple indicates.
- Sluggish revenue growth and relative underperformance: Q1 2026 revenue grew just 4.4% year-over-year to $93.68 billion, with sequential revenue flat around $94 billion for three quarters. The stock's 1-year return of +2.71% badly lags the S&P 500's +16.22%, producing a relative strength of -13.51.
- Capital deployment drought and succession overhang: Despite $58.81 billion in cash, Berkshire has struggled to find large-scale acquisitions amid elevated public-market valuations, and the post-Buffett transition to Greg Abel raises questions about sustaining the decentralized culture. The wide analyst target range ($510-$604) signals genuine uncertainty about capital allocation.
BRK-B Technical Analysis
Berkshire Hathaway's Class B shares are in a slow, steady uptrend, with the current price of $510.37 sitting roughly 9.9% above the 52-week low of $464.01 and about 5.1% below the 52-week high of $537.74 — positioning the stock at approximately 95% of its 52-week range. The 1-year price change of +2.71% is modest in absolute terms and materially lags the S&P 500's +16.22% over the same period, producing a relative strength reading of -13.51 versus the index. This combination of a positive but shallow trend near the upper end of the range suggests the stock is neither a momentum leader nor a distressed value play, but rather a low-beta compounder consolidating near highs while the broader market has run ahead of it. Recent momentum has improved markedly: the 1-month change of +0.07% masks a strong relative performance versus SPY's -1.06% (relative strength of +1.13), while the 3-month change of +4.32% and 6-month change of +4.15% show consistent, if unspectacular, appreciation. The 3-month relative strength of +1.28 versus SPY's +3.04% indicates Berkshire is keeping pace with a rising market, and the YTD gain of +2.72% against SPY's +12.08% (relative strength -9.36) confirms the stock has been a defensive laggard rather than a leader. With no RSI data provided, the price action alone — a grind higher from the March low near $464 to the September level above $510 — implies steady accumulation rather than speculative excess. Key technical support rests at the 52-week low of $464.01, with secondary support around the $490-$495 area that has repeatedly attracted buyers since June; resistance is defined by the 52-week high of $537.74, and a breakout above that level would signal renewed institutional demand and likely coincide with a rotation into defensive value. A breakdown below $464 would mark a significant trend failure and likely reflect broad risk-off conditions or company-specific disappointment on capital deployment. With a beta of just 0.603, Berkshire is roughly 40% less volatile than the market, meaning position sizing can be larger for equivalent risk budgets, but also that the stock will likely continue to underperform in strong risk-on rallies — a critical consideration for portfolio construction.
Beta
0.60
0.60x market volatility
Max Drawdown
-14.9%
Largest decline past year
52-Week Range
$464-$538
Price range past year
Annual Return
+4.3%
Cumulative gain past year
| Period | BRK-B Return | S&P 500 |
|---|---|---|
| 1m | +2.2% | -2.0% |
| 3m | +4.0% | +1.4% |
| 6m | +6.3% | +15.0% |
| 1y | +4.3% | +15.7% |
| ytd | +3.6% | +11.6% |
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BRK-B Fundamental Analysis
Berkshire's revenue trajectory is stable but decelerating at the margin: Q1 2026 revenue of $93.675 billion grew 4.4% year-over-year versus Q1 2025's $89.725 billion, a modest pace for a conglomerate of this scale. The multi-quarter trend shows revenue oscillating in a narrow band — $94.972 billion in Q3 2025, $94.232 billion in Q4 2025, and $93.675 billion in Q1 2026 — indicating flat sequential growth rather than acceleration. Segment data reveals the growth engine is insurance, with the Berkshire Hathaway Insurance Group contributing $25.312 billion, followed by Manufacturing at $20.672 billion and McLane at $11.936 billion, while BNSF at $5.994 billion and Berkshire Hathaway Energy at $6.661 billion reflect the softer freight and utility environments. The investment case therefore hinges less on top-line growth and more on underwriting discipline, float growth and capital allocation, since a 4.4% revenue growth rate is unlikely to drive meaningful multiple expansion on its own. Profitability remains robust but volatile: Q1 2026 net income was $10.106 billion on a net margin of 10.79%, down sharply from Q4 2025's $19.199 billion (20.37% margin) and Q3 2025's $30.796 billion (32.43% margin), reflecting the outsized influence of investment gains and losses rather than operating deterioration. Gross margin in Q1 2026 was 28.80%, up from 23.01% in Q4 2025 and 24.62% in Q3 2025, while the trailing gross margin of 23.63% and operating margin of 15.85% remain healthy for a diversified industrial-insurance hybrid. The key takeaway is that Berkshire's core operating earnings — evidenced by Q1 2026 operating income of $15.049 billion and EBITDA of $19.988 billion — are far more stable than reported net income, and investors should focus on operating profit trends rather than headline EPS, which swung from $14.28 in Q3 2025 to $4.68 in Q1 2026 largely on mark-to-market investment swings. The balance sheet is fortress-like: debt-to-equity of just 0.194, a current ratio of 6.75, and cash of $58.81 billion at Q1 2026 quarter-end provide enormous liquidity and minimal leverage risk. Free cash flow totaled $5.452 billion in Q1 2026 (TTM FCF of $23.872 billion), with operating cash flow of $10.438 billion comfortably covering capital expenditure of $4.986 billion, and the company deployed $9.69 billion on acquisitions in the quarter. ROE of 9.33% and ROA of 6.01% are modest relative to the company's cost of capital but reflect the drag of a massive low-yielding cash and fixed-income portfolio; the critical strength is that Berkshire funds its growth internally and remains a net buyer of assets rather than a dependent on external financing.
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?
Because Berkshire's trailing net income is positive, the PE ratio is the appropriate primary metric, and the stock trades at a trailing PE of 16.21x versus a forward PE of 22.997x — an unusual inversion where the forward multiple exceeds the trailing multiple. This gap implies the market expects earnings to decline in the coming year, which is consistent with the fact that trailing earnings have been inflated by large investment gains (particularly in 2024-2025) that are unlikely to repeat at the same magnitude; on a normalized operating-earnings basis, the forward multiple is arguably the more honest reflection of the stock's earnings power. The PEG ratio of -0.654 is not meaningful given the negative earnings growth implied, and the price-to-book ratio of 1.513x is the more relevant anchor for a conglomerate valued on asset accumulation. Relative to the broader Financial Services sector, Berkshire's 16.21x trailing PE screens cheap against diversified financial peers that often trade in the 18-25x range, and its 1.51x price-to-book is modest for a company with its credit quality and asset base. The price-to-sales ratio of 2.92x and EV/EBITDA of 16.20x are reasonable for a business with 15.85% operating margins and 18.03% net margins, though the negative EV-to-sales figure of -0.608 reflects the distorting effect of Berkshire's enormous investment portfolio and cash position on enterprise value calculations. The premium-to-book versus the sector is justified by Berkshire's unmatched balance sheet strength, insurance float and access to low-cost capital, but the discount on earnings reflects the market's skepticism about the repeatability of investment gains and the lack of a clear catalyst for multiple expansion. Historically, Berkshire's PE has ranged widely — from 4.75x in Q1 2023 to 62.5x in Q1 2025 — driven almost entirely by investment-gain volatility, making the PE a poor historical anchor; the price-to-book ratio is far more stable, ranging from roughly 1.29x (Q3 2022) to 1.76x (Q1 2025), and the current 1.51x sits near the middle-to-upper portion of that band. The current valuation therefore reflects a market that is paying a fair, but not distressed, price for Berkshire's asset base — neither the deep-value opportunity seen in 2022-2023 nor the premium multiple seen during the 2025 earnings peak.
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 and operational risks center on earnings volatility and modest returns on capital. Reported net income is heavily distorted by investment gains and losses, as evidenced by the swing from $30.80 billion in Q3 2025 to $10.11 billion in Q1 2026, which complicates earnings quality and makes the PE ratio an unreliable valuation anchor. ROE of 9.33% and ROA of 6.01% are modest relative to the cost of capital, reflecting the drag of a massive low-yielding cash and fixed-income portfolio. Additionally, revenue growth is decelerating at just 4.4% year-over-year in Q1 2026, with sequential revenue flat around $94 billion for three quarters, indicating limited organic momentum.
Market and competitive risks include valuation compression and relative underperformance. The stock trades at a forward PE of 23.0x, which is elevated relative to its trailing 16.21x and implies the market expects earnings to decline; if investment gains reverse further, the multiple could contract. Berkshire's beta of 0.603 means it will likely continue to lag in strong risk-on rallies, as shown by its 1-year relative strength of -13.51 versus the S&P 500. The lack of recent news and thin analyst coverage (only 3 analysts) reduces price discovery efficiency and could lead to sharper reactions to negative surprises. Competitive disruption in insurance, freight rail, and retail could pressure underwriting margins and volumes.
Worst-case scenario: A combination of a severe insurance catastrophe, a prolonged freight recession, and a sharp decline in the equity portfolio could trigger a significant drawdown. The 52-week low of $464.01 represents a -9.1% decline from the current price of $510.37, while the analyst low target of $510.00 is essentially at the current price. A more severe scenario, such as a broad market selloff or a major acquisition misstep, could push the stock toward its historical max drawdown of -14.95%, implying a price near $434. In this adverse scenario, an investor could lose approximately -15% from the current price, with downside to the 52-week low of $464 (-9.1%) as a more immediate risk.
FAQ
The key risks include: 1) Earnings volatility from investment gains/losses, as seen in the swing from $30.80 billion net income in Q3 2025 to $10.11 billion in Q1 2026, which distorts reported results. 2) Capital deployment risk: with $58.81 billion in cash, failure to find accretive acquisitions could lead to underperformance and multiple compression. 3) Competitive and macro risks: a freight recession could pressure BNSF, and a major insurance catastrophe could hurt underwriting profits. 4) Valuation risk: the forward PE of 23.0x is elevated, and if earnings decline further, the stock could de-rate. 5) Succession risk: the post-Buffett transition to Greg Abel introduces uncertainty about maintaining the decentralized culture. These risks are ranked from highest to lowest severity, with earnings volatility and capital deployment being the most immediate.
The 12-month forecast includes three scenarios: a bull case (25% probability) with a target range of $580-$604, driven by successful capital deployment and a freight recovery; a base case (55% probability) with a target range of $510-$560, assuming modest growth and stable operating earnings; and a bear case (20% probability) with a target range of $464-$510, triggered by insurance losses, a freight recession, or a market selloff. The base case is most likely, with the key assumption that revenue grows 3-5% and operating earnings remain around $15 billion per quarter. The analyst average target of $547.67 aligns with the base case. The wide range reflects genuine uncertainty about capital allocation and investment gains.
BRK-B appears fairly valued, with a trailing PE of 16.21x that is below the 18-25x range typical for diversified financial peers, but a forward PE of 23.0x that is above the trailing multiple and implies expected earnings decline. The price-to-book ratio of 1.51x sits in the middle-to-upper portion of its historical range (1.29x-1.76x), suggesting the market is paying a fair price for the asset base. The PEG ratio of -0.654 is not meaningful due to negative implied earnings growth. Relative to its own history, the stock is not cheap, but it is not expensive either. The market appears to expect modest earnings normalization and continued capital deployment, but not a significant re-rating. Overall, the valuation is fair, with a slight premium to book justified by balance sheet strength.
From a risk/reward perspective, BRK-B is a reasonable buy for conservative investors seeking low-volatility exposure to a diversified conglomerate with a fortress balance sheet. The stock trades at $510.37, with an average analyst target of $547.67 implying +7.3% upside, and a high target of $604 (+18.3%). However, the forward PE of 23.0x is elevated relative to the trailing 16.21x, suggesting limited near-term multiple expansion. The biggest downside risk is a break below the 52-week low of $464.01, which would represent a -9.1% decline. For long-term investors with a 3-5 year horizon, the stock offers a margin of safety through its 0.603 beta and $58.81 billion cash position, but for those seeking high growth, it may underperform. It is a good buy for defensive portfolios, but not a compelling growth story.
BRK-B is best suited for long-term investment, given its low beta (0.603), stable operating cash flows, and lack of a dividend, which makes it less attractive for short-term trading. The stock's 1-year return of +2.71% lags the S&P 500's +16.22%, but its defensive characteristics and fortress balance sheet provide downside protection. Earnings visibility is moderate, with operating earnings more stable than reported net income, but investment gains introduce volatility. A suggested minimum holding period is 3-5 years to allow for potential capital deployment and compounding of book value. Short-term traders may find limited momentum, as the stock trades near the middle of its 52-week range ($464-$538). For those seeking income, the zero dividend yield is a drawback, but for total return and capital preservation, it is a suitable long-term core holding.
