We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BRK.B Stock Outperforms Industry, Trades at a Premium: Should You Buy?
Read MoreHide Full Article
Key Takeaways
BRK.B has gained 12.1% YTD, outpacing its industry but lagging the S&P 500 and Finance sector.
The stock trades at a 1.57 P/B ratio, above its industry average, suggesting a premium valuation.
The 2025 EPS estimate has risen 3.2% in the past 30 days, while the 2026 estimate has declined 3.4%.
Shares of Berkshire Hathaway Inc. (BRK.B - Free Report) have gained 12.1% year to date, outperforming the industry’s increase of 11%. However, the stock has underperformed the Finance sector’s gain of 13.2% as well as the Zacks S&P 500 composite index’s rise of 17.6% in the same time frame.
Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. This provides it stability in various economic cycles.
BRK.B is now trending below its 50-day simple moving average (SMA), indicating the possibility of a downside ahead.
BRK.B vs Industry, Sector, S&P 500
Image Source: Zacks Investment Research
BRK.B’s peer, Chubb Limited (CB - Free Report) , has gained 7.1% year to date, while another peer, The Progressive Corporation (PGR - Free Report) , has lost 6.1% year to date.
Chubb, a premier global provider of property and casualty insurance and reinsurance, is targeting growth in the middle-market segment across domestic and international regions. Chubb is enhancing its core package solutions and expanding its specialty insurance portfolio. With focused strategic initiatives, Chubb seeks sustainable growth and stronger competitive positioning.
Progressive, one of the top auto insurers in the United States, is well-positioned to sustain profitability through its strong market presence, broad product offerings and disciplined underwriting. Progressive is advancing its strategy by promoting bundled auto insurance, limiting exposure to high-risk properties, and enhancing segmentation with targeted, innovative solutions. With this approach, Progressive continues to strengthen its competitive edge.
BRK.B Shares Are Expensive
The stock is overvalued compared with its industry. It is currently trading at a price-to-book multiple of 1.57, higher than the industry average of 1.53.
Image Source: Zacks Investment Research
Berkshire is relatively cheap compared to Progressive but expensive compared to Chubb.
Average Target Price for BRK.B Suggests Upside
Based on short-term price targets offered by four analysts, the Zacks average price target is $537.75 per share. The average suggests a potential 5.7% upside from the last closing price.
Factors to Note for BRK.B Stock
Berkshire Hathaway’s insurance segment is the backbone of its operational model and contributes roughly a quarter of total revenues. This segment remains a key driver of long-term growth, supported by disciplined underwriting practices, an extensive market presence and a demonstrated ability to perform well even under challenging economic conditions. This segment produces significant underwriting “float” that Warren Buffett has long leveraged for investments.
Berkshire Hathaway’s strong insurance foundation is reinforced by the performance of its other major business lines. Berkshire Hathaway Energy (BHE), the company’s regulated utility division, produces consistent cash flows and continues to broaden its investment in renewable power—supporting long-term global trends toward electrification and sustainability. Within this division, Burlington Northern Santa Fe (BNSF), Berkshire’s rail subsidiary, remains a strategically vital player in U.S. freight transport. Although BNSF is currently contending with a less favorable freight mix and reduced fuel surcharge revenue, it continues to represent a durable long-term asset, underpinned by steady utility demand and the critical role of freight infrastructure.
The Manufacturing, Service, and Retail segment offers additional cyclical upside. This group stands to gain from an improving economic environment and stronger consumer spending, both of which can lift revenue growth and expand profit margins.
Financially, Berkshire has one of the most conservative capital allocation strategies in the market. It holds more than $100 billion in cash, with roughly 90% invested in short-term U.S. Treasuries and other government-backed securities. While higher interest rates have boosted investment income, the Federal Reserve’s anticipated rate cuts should help maintain liquidity and support returns. This disciplined positioning allows Berkshire to quickly pursue acquisition opportunities while preserving a stable yield profile.
Berkshire has also been actively reshaping its equity portfolio—exiting BYD, trimming Apple and Bank of America holdings and increasing investments in Japanese trading houses like Mitsubishi and Mitsui. Recently, Berkshire bought shares in Alphabet, one of the most innovative companies in the modern technological age and one of the Magnificent Seven stocks. These moves emphasize management’s focus on stable, cash-generating assets that support future share buybacks and reinvestment.
Finally, Berkshire’s expanding insurance float—rising from $114 billion in 2017 to $176 billion by end of third-quarter 2025—continues to provide low-cost capital, fueling investments in durable, high-return assets and reinforcing its strong balance sheet and shareholder value creation.
Berkshire Hathaway’s Return on Capital
Return on equity (“ROE”) in the trailing 12 months was 7.3%, underperforming the industry average of 8%. Return on equity, a key profitability measure, reflects how effectively a company utilizes its shareholders’ funds. It is noteworthy that though BRK.B’s ROE lags the industry average, the metric has been improving consistently.
The same holds true for return on invested capital (ROIC), which has increased every year since 2020. This reflects BRK.B’s efficiency in utilizing funds to generate income. However, ROIC in the trailing 12 months was 5.9%, lower than the industry average of 6.2%.
Mixed Analyst Sentiment
The Zacks Consensus Estimate for 2025 earnings implies a 5% year-over-year decrease, and the same for 2026 suggests a 4.2% decrease.
The consensus estimate for 2025 earnings has moved up 3.2% in the past 30 days, while that for 2026 has moved down 3.4% in the same time frame.
Image Source: Zacks Investment Research
Parting Thoughts on BRK.B Shares
Berkshire Hathaway has long added strength and stability to investors’ portfolios, delivering consistent shareholder value for nearly six decades under Warren Buffett’s leadership.
The attention now turns to the company’s future as Greg Abel prepares to step in as CEO on Jan. 1, 2026, with Buffett continuing as executive chairman.
However, with Berkshire trading at a premium valuation, witnessing modest returns on capital, facing near-term earnings headwinds, and having a mixed analyst sentiment, a wait-and-see approach seems prudent for this Zacks Rank #3 (Hold) stock.
Image: Shutterstock
BRK.B Stock Outperforms Industry, Trades at a Premium: Should You Buy?
Key Takeaways
Shares of Berkshire Hathaway Inc. (BRK.B - Free Report) have gained 12.1% year to date, outperforming the industry’s increase of 11%. However, the stock has underperformed the Finance sector’s gain of 13.2% as well as the Zacks S&P 500 composite index’s rise of 17.6% in the same time frame.
Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. This provides it stability in various economic cycles.
BRK.B is now trending below its 50-day simple moving average (SMA), indicating the possibility of a downside ahead.
BRK.B vs Industry, Sector, S&P 500
Image Source: Zacks Investment Research
BRK.B’s peer, Chubb Limited (CB - Free Report) , has gained 7.1% year to date, while another peer, The Progressive Corporation (PGR - Free Report) , has lost 6.1% year to date.
Chubb, a premier global provider of property and casualty insurance and reinsurance, is targeting growth in the middle-market segment across domestic and international regions. Chubb is enhancing its core package solutions and expanding its specialty insurance portfolio. With focused strategic initiatives, Chubb seeks sustainable growth and stronger competitive positioning.
Progressive, one of the top auto insurers in the United States, is well-positioned to sustain profitability through its strong market presence, broad product offerings and disciplined underwriting. Progressive is advancing its strategy by promoting bundled auto insurance, limiting exposure to high-risk properties, and enhancing segmentation with targeted, innovative solutions. With this approach, Progressive continues to strengthen its competitive edge.
BRK.B Shares Are Expensive
The stock is overvalued compared with its industry. It is currently trading at a price-to-book multiple of 1.57, higher than the industry average of 1.53.
Image Source: Zacks Investment Research
Berkshire is relatively cheap compared to Progressive but expensive compared to Chubb.
Average Target Price for BRK.B Suggests Upside
Based on short-term price targets offered by four analysts, the Zacks average price target is $537.75 per share. The average suggests a potential 5.7% upside from the last closing price.
Factors to Note for BRK.B Stock
Berkshire Hathaway’s insurance segment is the backbone of its operational model and contributes roughly a quarter of total revenues. This segment remains a key driver of long-term growth, supported by disciplined underwriting practices, an extensive market presence and a demonstrated ability to perform well even under challenging economic conditions. This segment produces significant underwriting “float” that Warren Buffett has long leveraged for investments.
Berkshire Hathaway’s strong insurance foundation is reinforced by the performance of its other major business lines. Berkshire Hathaway Energy (BHE), the company’s regulated utility division, produces consistent cash flows and continues to broaden its investment in renewable power—supporting long-term global trends toward electrification and sustainability. Within this division, Burlington Northern Santa Fe (BNSF), Berkshire’s rail subsidiary, remains a strategically vital player in U.S. freight transport. Although BNSF is currently contending with a less favorable freight mix and reduced fuel surcharge revenue, it continues to represent a durable long-term asset, underpinned by steady utility demand and the critical role of freight infrastructure.
The Manufacturing, Service, and Retail segment offers additional cyclical upside. This group stands to gain from an improving economic environment and stronger consumer spending, both of which can lift revenue growth and expand profit margins.
Financially, Berkshire has one of the most conservative capital allocation strategies in the market. It holds more than $100 billion in cash, with roughly 90% invested in short-term U.S. Treasuries and other government-backed securities. While higher interest rates have boosted investment income, the Federal Reserve’s anticipated rate cuts should help maintain liquidity and support returns. This disciplined positioning allows Berkshire to quickly pursue acquisition opportunities while preserving a stable yield profile.
Berkshire has also been actively reshaping its equity portfolio—exiting BYD, trimming Apple and Bank of America holdings and increasing investments in Japanese trading houses like Mitsubishi and Mitsui. Recently, Berkshire bought shares in Alphabet, one of the most innovative companies in the modern technological age and one of the Magnificent Seven stocks. These moves emphasize management’s focus on stable, cash-generating assets that support future share buybacks and reinvestment.
Finally, Berkshire’s expanding insurance float—rising from $114 billion in 2017 to $176 billion by end of third-quarter 2025—continues to provide low-cost capital, fueling investments in durable, high-return assets and reinforcing its strong balance sheet and shareholder value creation.
Berkshire Hathaway’s Return on Capital
Return on equity (“ROE”) in the trailing 12 months was 7.3%, underperforming the industry average of 8%. Return on equity, a key profitability measure, reflects how effectively a company utilizes its shareholders’ funds. It is noteworthy that though BRK.B’s ROE lags the industry average, the metric has been improving consistently.
The same holds true for return on invested capital (ROIC), which has increased every year since 2020. This reflects BRK.B’s efficiency in utilizing funds to generate income. However, ROIC in the trailing 12 months was 5.9%, lower than the industry average of 6.2%.
Mixed Analyst Sentiment
The Zacks Consensus Estimate for 2025 earnings implies a 5% year-over-year decrease, and the same for 2026 suggests a 4.2% decrease.
The consensus estimate for 2025 earnings has moved up 3.2% in the past 30 days, while that for 2026 has moved down 3.4% in the same time frame.
Image Source: Zacks Investment Research
Parting Thoughts on BRK.B Shares
Berkshire Hathaway has long added strength and stability to investors’ portfolios, delivering consistent shareholder value for nearly six decades under Warren Buffett’s leadership.
The attention now turns to the company’s future as Greg Abel prepares to step in as CEO on Jan. 1, 2026, with Buffett continuing as executive chairman.
However, with Berkshire trading at a premium valuation, witnessing modest returns on capital, facing near-term earnings headwinds, and having a mixed analyst sentiment, a wait-and-see approach seems prudent for this Zacks Rank #3 (Hold) stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.