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Berkshire Hathaway Inc. (BRK.B), headquartered in Omaha, Nebraska, is a diversified holding company that owns businesses across insurance and reinsurance, freight rail transportation, utilities and energy, manufacturing services, and retailing. Valued at $920.31 billion by market cap, the company is chaired by prominent investor Warren Buffett, widely regarded as one of the world’s most successful investors.
The leading investment firm has outperformed the broader market considerably over the past year. BRK.B has gained 18.1% over this time frame, while the S&P 500 Index ($SPX) has risen 15.1%. In 2024, BRK.B stock is up 20.5%, compared to SPX’s 9% returns on a YTD basis.
Zooming in further, BRK.B’s underperformance is apparent compared to the S&P 500 Financials Sector SPDR (XLF). The exchange-traded fund has gained 19% over the past year. However, the stock’s YTD gains outshine the ETF’s 11% gains.
BRK.B’s overall performance can be attributed to its solid financial performance. On Aug. 2, BRK.B shares closed down marginally after it reported its Q2 results. The company’s total operating earnings rose 15% year over year to $11.6 billion, thanks to the strong performance of auto insurer GEICO. GEICO’s underwriting earnings nearly doubled from the year-ago quarter to over $2.2 billion. Meanwhile, BRK.B raised its cash level to a record $277 billion as it reduced its stock holdings.
For the current fiscal year, ending in December, analysts expect BRK.B to report an EPS growth of 9.8% to $18.87 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the five analysts covering BRK.B stock, the consensus rating is a “Moderate Buy.” That’s based on two “Strong Buy” ratings and three “Holds.”
This configuration is slightly more bullish than three months ago, with one suggesting a “Strong Buy.”
Recently, TD Cowen’s analyst Andrew Kligerman initiated coverage on BRK.B stock with a “Hold” rating and set the price target at $465, implying a potential upside of 8.9% from current levels.
The mean price target of $477.50 represents an 11.8% premium to BRK.B’s current price levels. The Street-high price target of $490 suggests an upside potential of 14.7%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
