Berkshire Hathaway Stock Lags Industry in 3 Months: Is it Still a Buy?

Shares of Berkshire Hathaway Inc. BRK.B have lost 3.2% in the past three months compared with the industry’s 2.4% decline and the Finance sector’s 0.8% decrease. The Zacks S&P 500 composite has gained 8.9% in the same time frame.  Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. This provides it stability in various economic cycles.BRK.B vs Industry, Sector, S&P 500 in 3 MonthsImage Source: Zacks Investment ResearchBRK.B’s peer, Chubb Limited CB, has lost 3% in the past three months, while another peer, The Progressive Corporation PGR, has lost 5.8% in the same time frame.BRK.B is ExpensiveShares of Berkshire Hathaway are overvalued compared with its industry. The stock is currently trading at a price-to-book multiple of 1.44, higher than the industry average of 1.38 but below the three-year median of 1.52.  It has a Value Score of C.  Image Source: Zacks Investment ResearchBerkshire Hathaway is relatively cheap compared with PGR and CB.The Case for BRK.B StockBerkshire Hathaway’s insurance operations remain at the core of its business model, accounting for nearly a quarter of total revenues and serving as a major engine of long-term value creation. The segment benefits from disciplined underwriting practices, extensive market presence and a strong track record of profitability across economic cycles. A key strength is the sizable underwriting float generated by the business, which Warren Buffett has consistently utilized as a low-cost funding source for investments across Berkshire’s diversified operations.At the same time, Berkshire Hathaway continues to rebalance its investment portfolio to enhance income stability and geographic diversification. The company has expanded its exposure to Japanese trading houses while reducing stakes in payment companies and increasing focus on airline investments.The insurance strength is complemented by Berkshire Hathaway’s diversified operating businesses. Berkshire Hathaway Energy (BHE), the regulated utility subsidiary, delivers stable and predictable cash flows while steadily expanding its renewable energy portfolio. These investments position BHE to benefit from long-term themes such as electrification, decarbonization and sustainability.BNSF Railway also remains a strategically valuable asset and one of the largest freight rail operators in the United States. Despite near-term challenges from weaker freight demand and lower fuel surcharge revenues, BNSF continues to represent a durable, high-quality business supported by essential transportation needs.Additionally, Berkshire’s Manufacturing, Service and Retail businesses provide further diversification. Although these operations are more cyclical, they offer meaningful upside potential during periods of stronger economic activity through higher sales volumes and margin expansion.Financially, Berkshire maintains a highly conservative capital allocation strategy. Cash and U.S. Treasury holdings exceeded $370 billion at the end of 2025, providing substantial liquidity for acquisitions while also generating steady investment income. Berkshire’s insurance float, which reached $176.9 billion as of March 31, 2026, remains a powerful source of low-cost capital supporting long-term shareholder value creation.Berkshire Hathaway’s Return on CapitalReturn on equity (ROE) in the trailing 12 months was 6.6%, underperforming the industry average of 7.4%. Return on equity, a key profitability measure, reflects how effectively a company utilizes its shareholders’ funds. It is noteworthy that though BRK.B’s ROE lags the industry average, the metric has been improving consistently.The same holds true for return on invested capital (ROIC), which has increased every year since 2020. This reflects BRK.B’s efficiency in utilizing funds to generate income. However, ROIC in the trailing 12 months was 5.4%, lower than the industry average of 5.7%.Analyst Sentiment on BRK.BThe Zacks Consensus Estimate for 2026 revenues indicates a 3.7% year-over-year increase, but the same for earnings implies a 0.6% year-over-year decrease. However, the consensus estimate for 2027 revenues and EPS indicates a year-over-year increase. The consensus estimate for 2026 and 2027 earnings has moved 1.2% and 0.5% north, respectively, in the last 30 days. Image Source: Zacks Investment ResearchThe consensus estimates for CB’s 2026 and 2027 earnings moved north in the last 30 days.Estimates for PGR’s 2026 and 2027 earnings moved down in the same time frame.Parting Thoughts on BRK.B SharesBerkshire Hathaway has been a cornerstone of investor portfolios for decades, generating steady shareholder value under Warren Buffett’s nearly 60-year leadership. The spotlight now shifts to the next chapter, with Greg Abel as CEO, while Buffett remains executive chairman. Despite the stock trading at a premium, given optimistic analysts' sentiment, one can consider adding this Zacks Rank #2 (Buy) stock to their portfolio.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks