Berkshire Hathaway Inc. (BRK-B) Stock Analysis Report

Ticker: BRK-B Exchange: NYSE Sector: Financial Services Industry: Conglomerate Market Capitalization: $775 billion (as of latest available data) 52-Week Range: $296.07 - $390.21 Dividend Yield: N/A P/E Ratio: 12.87 Beta: 0.89

Company Overview

Berkshire Hathaway Inc. is a multinational conglomerate holding company headquartered in Omaha, Nebraska. Led by Chairman and CEO Warren Buffett, Berkshire owns a diverse portfolio of businesses, including insurance, utilities, manufacturing, retail, and transportation. It also holds significant equity positions in publicly traded companies such as Apple Inc. (AAPL), Coca-Cola (KO), and American Express (AXP).

Recent Performance & Key Financials

Financial Metric Value (Latest Quarter) YoY Change
Revenue $92.5 billion +21%
Net Income $12.6 billion +18%
EPS $8.94 +16%
Operating Income $10.8 billion +15%
Cash & Equivalents $157.2 billion +12%

Berkshire Hathaway has continued to exhibit strong revenue and earnings growth, primarily driven by its insurance operations (GEICO, Berkshire Hathaway Reinsurance) and strong performance in its equity investments, particularly Apple Inc. The company’s cash reserves remain significant, providing it with strategic flexibility for future acquisitions and buybacks.

Stock Performance & Valuation

The stock has shown steady growth, benefiting from strong financials and Buffett’s disciplined investment strategy. Compared to the broader S&P 500 index, BRK-B has provided 14.2% annualized returns over the last five years.

Valuation Metrics:

  • P/E Ratio: 12.87 (Compared to the industry average of 14.50)
  • Price-to-Book (P/B) Ratio: 1.5
  • EV/EBITDA: 10.2
  • ROE (Return on Equity): 11.8%

The valuation remains attractive for long-term investors, given the company’s stability, growth prospects, and strong fundamentals.

Investment Thesis

Bull Case:

  1. Strong Leadership & Track Record – Warren Buffett and his management team have a consistent history of outperforming the market.
  2. Diversified Business Model – Exposure to multiple industries reduces overall risk.
  3. Significant Cash Reserves – Ability to make strategic acquisitions and weather economic downturns.
  4. Growing Equity Portfolio – Investments in tech and consumer goods continue to drive returns.

Bear Case:

  1. Succession Risk – Buffett (age 94) and Charlie Munger (age 100) are key figures, and their eventual departure raises concerns.
  2. Lower Growth in Legacy Businesses – Some core segments, like railroads and energy, face growth challenges.
  3. No Dividend Policy – Some investors prefer companies with regular dividend payouts.

Analyst Recommendation

Berkshire Hathaway (BRK-B) remains a solid long-term investment, especially for investors seeking stable, diversified exposure across multiple industries. Given its current valuation and strong fundamentals, we recommend a BUY rating with a 12-month price target of $415, representing a potential 10% upside from current levels.

Conclusion

Berkshire Hathaway is a resilient and well-managed conglomerate with a proven investment strategy. While there are some concerns regarding leadership succession and slowing growth in certain sectors, the company’s strong balance sheet, prudent capital allocation, and diverse revenue streams make it a compelling long-term investment.

Recommendation: BUY Price Target: $415 Time Horizon: 12-24 months

Disclaimer: This report is for informational purposes only and should not be considered financial advice. Investors should conduct their own due diligence before making investment decisions.