Berkshire Hathaway (BRK.B) — Fairly Valued With a Low Growth Profile
Berkshire Hathaway returned losses of -6.0% last year, with its stock price reaching a high of $350.86 and a low of $259.85. Over the same period, the stock returned a similar cumulative performance to the S&P 500. As of April 2023, the company's 50-day average price was $308.09.
Berkshire Hathaway Inc., through its subsidiaries, engages in the insurance, freight rail transportation, and utility businesses worldwide. Based in Omaha, NE, the Large-Cap Financial Services company has 383,000 full time employees. Berkshire Hathaway has not offered a dividend during the last year.
Declining Revenues With a Flat Capital Expenditure Trend:
|Depreciation & Amort.||-$10,064,000||-$10,596,000||-$10,718,000||-$10,899,000|
|Earnings Per Share||$33.22||$17.78||$39.64||-$10.49|
|Free Cash Flow||$22,708,000||$26,761,000||$26,145,000||$21,760,000|
|Long Term Debt||$98,682,000||$113,547,000||$111,911,000||$120,315,000|
|LT Debt to Equity||0.23||0.26||0.22||0.25|
Berkshire Hathaway does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $17.79, the company has a forward P/E ratio of 18.2. In comparison, the average P/E ratio for the Financial Services sector is 14.34. On the other hand, the market is undervaluing Berkshire Hathaway in terms of its equity because its P/B ratio is 0.0. In comparison, the sector average is 1.57. In conclusion, Berkshire Hathaway's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Berkshire Hathaway Is the Subject of Mixed Market Indicators:
The lone analyst who follows Berkshire Hathaway has a rating of hold and a target price of $371.0, which is -17.0 away from its current price.
Berkshire Hathaway has a very low short interest because 0.6% of the company's shares are sold short. Institutions own 66.1% of the company's shares, and the insider ownership rate stands at 0.37%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 11% stake in the company is worth $44,765,748,888.