Berkshire Hathaway’s Latest Earnings Report: A Mixed Bag for Investors
Omaha’s Berkshire Hathaway Inc. (BRK.B) maintains its status as a major player with a market cap of $1 trillion. The company invests in diverse sectors, including insurance, utilities, manufacturing, and retail, alongside holding significant stakes in top-tier companies.
Stock Performance Comparison Reveals Challenges
Over the past year, Berkshire Hathaway stock has struggled compared to the broader market. In that timeframe, BRK.B has increased by 32%, while the S&P 500 Index ($SPX) recorded a slight edge with a 32.3% gain. However, in 2024, BRK.B’s performance has improved, rising 31.1% against the SPX’s 24.7% year-to-date returns.
BRK.B vs. Financial Services ETFs
Closer analysis shows BRK.B’s underperformance relative to the iShares U.S. Financial Services ETF (IYG), which has enjoyed a robust 48.7% increase over the last year and 33.1% on a year-to-date basis.
Q3 Earnings Report: Key Takeaways
On November 2, shares of Berkshire Hathaway fell 2.2% following the release of its Q3 earnings. The company reported operating earnings of $10.1 billion, down 6.2% from last year. This decline corresponds with a 0.2% decrease in revenue, totaling $93 billion, and a 0.7% rise in costs to $81.2 billion, driven by higher insurance underwriting and administrative expenses.
In contrast, the company reported net earnings attributable to shareholders of $26.3 billion, a strong recovery from a $12.8 billion loss during the same period last year. This rebound came largely from $16.2 billion in investment gains.
Future Earnings Expectations
Looking ahead, analysts project that BRK.B will achieve EPS growth of 14.1% this fiscal year, reaching $19.60 on a diluted basis. The company has had a mixed track record regarding earnings surprises in recent quarters, beating estimates in three out of the last four periods.
Currently, six analysts cover BRK.B stock, presenting a consensus rating of “Moderate Buy,” supported by two “Strong Buy” and four “Hold” ratings.
Analysts Revise Price Targets
In recent developments, UBS has raised its price target for Berkshire Hathaway to $538, signaling a 15% potential upside from current levels. This revision is supported by improved Q3 earnings prospects resulting from reduced catastrophe losses and enhanced reinsurance underwriting.
The average price target now sits at $477.75, indicating a modest 2.1% premium relative to BRK.B’s current price. Notably, the highest suggested price target of $531 reflects a potential increase of 13.5%.
On the date of publication, Rashmi Kumari 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.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
