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Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK.B) engages in activities related to insurance, railroads, energy, manufacturing, retail, and services across diverse sectors. Valued at $998.8 billion by market cap, the company operates North America's extensive railroad systems and generates and distributes energy from various sources like natural gas, coal, wind, and solar. The company is expected to announce its fiscal Q4 2024 on Friday, Feb. 28.
Ahead of the event, analysts expect BRK.B to report a profit of $4.43 per share, up 13% from $3.92 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing on another occasion. In Q3, BRK.B reported an EPS of $4.68, which missed the consensus estimate by 2.7%.
For fiscal 2024, analysts expect BRK.B to report EPS of $19.78, up 15.1% from $17.18 in fiscal 2023.
BRK-B stock has underperformed the S&P 500’s ($SPX) 25.3% gain over the past 52 weeks, with shares up 23% during this period. In addition, it lagged behind the Financial Select Sector SPDR Fund’s (XLF) 32.7% return over the same time frame.
BRK.B's underperformance is due to the pressure on its insurance business from rising severe weather events like hurricane helene, the financial impact of California's wildfires, and the challenges posed by climate change.
Shares of BRK.B shares fell over 2% following its Q3 results on Nov. 2. Operating earnings of $10.1 billion marked a 6.2% year-over-year decline, reflecting higher costs and lower revenues, which disappointed investors. The Railroad, Utilities, and Energy segment saw a sharp 9.1% drop in operating revenues to $23.9 billion, significantly missing the estimate while cash flow from operating activities declined 25.4% year-over-year to $26 billion. Additionally, the company reported rising costs and expenses, particularly in its Insurance and Other segments, which raised concerns about profitability despite a 12.1% increase in shareholders' equity.
Analysts’ consensus opinion on BRK.B stock is moderately bullish, with a “Moderate Buy” rating overall. Out of six analysts covering the stock, two advise a “Strong Buy” rating and four give a “Hold.” As of writing, BRK.B is trading below the average analyst price target of $496.50.
