BRK-B Stock Analysis: A Mixed Outlook Ahead!
🔴 Recommendation: BRK-B presents a complex financial picture with a cautious hold recommendation, as it showcases both bullish trends and bearish signals.
📈 Key Highlights:
Profitability: Strong net income of $30.35 billion, reflecting robust profitability and operational efficiency.
Growth: Year-over-year revenue growth of 28.08%, although recent revenue growth has slowed to 1.20%.
Institutional Support: High institutional ownership at 66.02%, indicating significant confidence from large investors.
⚠️ Caution Flags:
Debt Concerns: Negative net interest income of $1.23 billion and an average net debt of $85.60 billion raise questions about financial flexibility.
Mixed Signals: Bearish indicators such as a StochRSI crossover and MACD negative histogram suggest potential short-term volatility.
As we delve deeper into the analysis, we will explore the price trends, technical indicators, financial health, valuation metrics, and the latest news impacting BRK-B. Stay tuned for a comprehensive breakdown of what lies ahead for this intriguing stock! 👇
BRK-B Price Analysis

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BRK-B stock presents a complex financial picture, characterized by both positive and negative indicators. On the positive side, the stock is currently experiencing a bullish divergence in the WaveTrend indicator, suggesting a potential reversal in momentum. Additionally, the price is above the 50-day and 200-day EMA, indicating a strengthening bullish trend. The stock is also above the middle band of its Bollinger Bands, which typically signifies an uptrend, although caution is warranted due to potential overbought conditions. Furthermore, the On-Balance Volume (OBV) is increasing, reinforcing the bullish sentiment.
However, there are notable negative indicators that investors should consider. The StochRSI shows a bearish crossover, which could signal a weakening momentum. Additionally, the MACD has exhibited a negative histogram crossover, suggesting a potential shift in trend direction.
Overall, while BRK-B is currently in a bullish trend with several positive indicators, the presence of bearish signals indicates that investors should proceed with caution. The mixed signals suggest that while there is potential for further gains, the stock may also face short-term volatility. Therefore, a hold recommendation is advisable, allowing investors to monitor the situation closely for clearer signals before making further investment decisions.
BRK-B Fundamental Analysis
BRK-B’s recent financial performance presents a compelling case for investment, characterized by strong profitability and operational efficiency. The company reported a robust net income of $30.35 billion, showcasing its ability to generate substantial profits. Furthermore, the year-over-year increase in net income is a positive indicator for future performance. The operating margin stands at an impressive 100.00%, reflecting exceptional operational efficiency and effective cost control, while the net profit margin of 25.83% underscores the company’s strong capacity to generate profits after accounting for all expenses.
However, there are some concerns to consider. The net interest income was negative at $1.23 billion, suggesting that the company is currently paying more in interest than it earns on its assets, which could impact future profitability.
In terms of valuation, BRK-B has a forward P/E ratio of 23.01, indicating a reasonable valuation relative to earnings expectations. Conversely, the price-to-sales ratio of 2.71 suggests that the stock may be slightly overvalued in relation to its revenue generation. Additionally, the earnings growth rate of -14.70% raises concerns about potential declines in earnings, which could affect future growth prospects.
Looking at growth and profitability, the company reported revenue of $117.51 billion, with a year-over-year growth of 28.08%, indicating strong growth potential. The operating margin of 41.77% further demonstrates solid operational efficiency. However, a slowdown in revenue growth, with a rate of just 1.20%, may warrant caution among investors.
From a shareholder perspective, BRK-B shows positive net cash from financing activities of $17.64 billion, indicating effective capital raising. The company has also engaged in stock repurchases amounting to $17.20 billion, signaling management’s confidence in its future prospects. However, the average ordinary shares outstanding at 1,441,703 could indicate potential dilution if new shares are issued.
Analyzing the balance sheet, the current ratio of 3.19 suggests a strong liquidity position, allowing the company to comfortably cover its short-term liabilities. However, the average net debt of $85.60 billion requires further investigation regarding its impact on financial flexibility. The debt-to-equity ratio of 0.28 indicates a moderate level of leverage, which may be sustainable but should be monitored closely. Additionally, a cash to total assets ratio of 0.04 points to limited financial flexibility and potential vulnerability to economic shocks.
In terms of cash flow, BRK-B boasts an average free cash flow of $50.62 billion, indicating ample cash available for investments, debt reduction, or dividends. The average capital expenditures of $15.29 billion suggest that the company is actively investing in growth and expansion. However, the negative net interest income could pose challenges for future cash flows if not addressed.
Overall, BRK-B demonstrates strong profitability and operational efficiency, with positive indicators outweighing the negatives. While there are concerns regarding debt levels and a slowdown in revenue growth, the company’s solid financial health leads to a recommendation to buy. Investors should remain vigilant and consider the potential risks while capitalizing on the company’s strengths.
Financial Health
🟢 Net Income for the most recent period was $30.35 billion, indicating strong profitability.
🟢 Year-over-year net income increased, which is a positive sign for future performance.
🟢 Operating Margin of 100.00% suggests exceptional operational efficiency and cost control.
🟢 Net Profit Margin of 25.83% reflects the company’s strong ability to generate profits after all expenses.
🔴 Net Interest Income was negative at $1.23 billion, indicating the company is paying more in interest than it earns on its assets.
Valuation
🟢 Forward P/E ratio of 23.01 indicates reasonable valuation relative to earnings expectations.
🔴 Price-to-Sales Ratio of 2.71 suggests the stock may be slightly overvalued compared to its revenue generation.
🔴 Earnings Growth of -14.70% indicates a decline in earnings, which could be a concern for future growth.
Growth and Profitability
🟢 Revenue for the most recent period was $117.51 billion, with a year-over-year growth of 28.08%, indicating strong growth potential.
🟢 Operating Margin of 41.77% demonstrates strong operational efficiency.
🔴 Revenue Growth of 1.20% indicates a slowdown in revenue growth, which may warrant caution.
Shareholder Information
🟢 Positive net cash from financing activities of $17.64 billion indicates the company is raising capital effectively.
🟢 Stock repurchases of $17.20 billion can signal management’s confidence in the company’s future prospects.
🔴 Average Ordinary Shares Outstanding at 1,441,703 could indicate potential dilution if new shares are issued.
Income Statement
🟢 Strong Net Income of $30.35 billion shows the company’s profitability.
🟢 Operating Margin of 100.00% suggests efficient operations.
🔴 Year-over-year revenue growth of 1.20% indicates a slowdown, which could be a concern for investors.
Balance Sheet
🟢 Current Ratio of 3.19 indicates a strong liquidity position, suggesting the company can comfortably cover its short-term liabilities.
🔴 Average Net Debt of $85.60 billion warrants further investigation into its impact on financial flexibility.
🔴 Debt-to-Equity Ratio of 0.28 suggests a moderate level of leverage, which may be sustainable but requires monitoring.
🔴 Cash to Total Assets Ratio of 0.04 indicates limited financial flexibility and vulnerability to economic shocks.
Cashflow
🟢 Average Free Cash Flow of $50.62 billion indicates the company has cash available for investments, debt reduction, or dividends.
🟢 Average Capital Expenditures of $15.29 billion suggests the company is investing in growth and expansion.
🔴 Negative net interest income could impact future cash flows if not addressed.
Overall, the company shows strong profitability and operational efficiency, but there are concerns regarding its debt levels and revenue growth slowdown. The positive indicators outweigh the negatives, leading to a recommendation to buy.
BRK-B News Analysis
Recent news surrounding BRK-B presents a mixed outlook for investors. While there are positive developments in government investments and strategic initiatives, concerns regarding labor market strategies and potential volatility in the market could impact investor sentiment.
Summary of news related to BRK-B indicates a blend of positive and negative factors. The federal government’s investment in satellite communications is a positive sign for technological advancement, while concerns from labor market ministers about workforce strategies could signal potential challenges ahead. Additionally, the ongoing situation in China may introduce volatility that investors should be wary of.
🟢 The federal government is investing to strengthen Canada’s expertise in satellite communications, which could enhance technological growth and innovation.
🟢 This investment may lead to increased opportunities for companies involved in satellite technology, potentially benefiting BRK-B indirectly.
🔴 Concerns from provincial and territorial labor market ministers regarding the federal government’s approach to workforce strategies could indicate potential challenges in the labor market, affecting economic stability.
🔴 The article on the China stimulus watch suggests that investors should brace for volatility, which could impact market sentiment and stock performance.
🔴 Walgreens’ decision to close around 1,200 unprofitable stores highlights challenges in the retail sector, which may have ripple effects on related investments, including those held by BRK-B.
BRK-B Holders Analysis
The financial health of BRK-B shows a mixed outlook, with strong institutional backing but low insider ownership raising some concerns.
🟢 BRK-B has a **high institutional ownership** at **66.02%**, indicating significant interest from large investors, which often correlates with stability and confidence in the stock’s future performance. Major holders like Vanguard Group and Blackrock have substantial stakes, suggesting they believe in the company’s long-term growth.
🔴 However, the **insider ownership is very low at 0.39%**, which might indicate a lack of confidence from company management or a high degree of external control. This could lead to volatility if institutional investors decide to sell.
🟡 The **number of institutional holders is quite large at 4829**, which indicates a diversified ownership structure. This can be a positive sign as it reduces the risk associated with any single investor’s actions.
🟡 Recent insider transactions show minimal activity, with no significant purchases in the last six months. This lack of insider buying could be interpreted as a lack of confidence from those closest to the company.
🔴 The stock has experienced some volatility, and while institutional interest is strong, the low insider ownership could lead to uncertainty in the short term.
BRK-B Analyst Ratings
The analyst ratings for BRK-B show a generally positive outlook, with a total of 7 buy or strong buy recommendations against only 2 hold ratings and no sell or strong sell ratings. This indicates a favorable sentiment among analysts towards the stock. 🟢
In the past month, there has been 1 strong buy, 3 buy, and 2 hold ratings, which reflects a stable interest in the stock. The recent initiation of coverage by TD Cowen with a hold rating suggests a cautious approach, but the lack of sell ratings indicates that analysts are not bearish on the stock.
Looking ahead, the stock is likely to perform well in the next month, supported by the overall positive sentiment and the absence of negative ratings. However, the medium confidence level suggests that investors should remain vigilant for any changes in market conditions or company performance that could impact the stock’s trajectory.
BRK-B Economic Analysis
Based on the US economic and market data:
🟢 The **unemployment rate** has increased slightly to **4.3%**, but this is still relatively low, indicating a stable labor market which can support consumer spending.
🟢 **Retail sales** have shown a positive trend, increasing to **627,510**, suggesting healthy consumer demand that could benefit Berkshire Hathaway’s diverse business operations.
🟡 The **CPI** remains stable at **314.540**, indicating that inflation is under control, which is favorable for economic growth and corporate profitability.
🔴 The **monthly treasury yield** has risen to **4.25%**, which could lead to higher borrowing costs for companies, potentially impacting profitability in the long run.
🟢 The **GDP** growth rate is stable at **5737.189**, indicating a resilient economy that supports corporate earnings, which is beneficial for BRK-B.
Overall, while there are some concerns regarding rising yields, the underlying economic indicators suggest a stable environment for Berkshire Hathaway, making it a good time to consider buying BRK-B. The stock is currently trading at **465.44**, with a target mean price of **500.5**, indicating a potential upside of approximately **7.5%** over the next month.
Disclaimer
Investors may consider the AI predictions and news summaries as one factor in their investment decisions alongside their own research and risk tolerance.