BRK.B Trading at a Discount to 52-Week High: What Should Investors Do?

Shares of Berkshire Hathaway Inc. BRK.B closed at $493.99 on Wednesday, an 8.9% discount to its 52-week high of $542.07. 

BRK.B stock has lost 1.8% year to date compared with the industry’s 1.4% and the Finance sector’s 0.4% decrease. The Zacks S&P 500 composite has gained 0.4% 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

BRK.B’s peer, Chubb Limited CB, has gained 7.2% year to date, while another peer, The Progressive Corporation PGR, has lost 10.2% in the same time frame.

BRK.B is Expensive

Shares of Berkshire Hathaway are overvalued compared with its industry. The stock is currently trading at a price-to-book multiple of 1.52, higher than the industry average of 1.46 but below the three-year median of 1.53.  

It has a Value Score of D. Berkshire Hathaway is relatively cheap compared with PGR, but expensive compared with CB.

The Case for BRK.B Stock

Berkshire Hathaway’s insurance operations sit at the core of its business model, accounting for roughly a quarter of total revenues and serving as a primary engine of long-term value creation. The segment’s competitive advantage lies in disciplined underwriting, extensive market reach and a consistent ability to remain profitable across economic cycles. A defining strength is the substantial underwriting float it generates, which Warren Buffett has long deployed as a low-cost source of capital to fund investments throughout the broader enterprise.

This insurance platform is complemented by Berkshire Hathaway’s other major operating businesses. Berkshire Hathaway Energy (“BHE”), the company’s regulated utility subsidiary, delivers stable and predictable cash flows while steadily expanding its renewable energy portfolio. These investments align with enduring global trends such as electrification, decarbonization and sustainability, positioning BHE to benefit from long-term structural demand.

Within the group, Burlington Northern Santa Fe (“BNSF”) stands out as a strategically significant asset and one of the largest freight rail networks in the United States. Although BNSF is currently facing headwinds from an unfavorable freight mix and lower fuel surcharge revenues, it remains a high-quality, long-duration business supported by essential freight demand and the continued importance of U.S. transportation infrastructure.

Berkshire’s Manufacturing, Service and Retail segment further enhances diversification and growth potential. While more cyclical in nature, this group could see meaningful upside from stronger economic activity and improved consumer demand, which may drive higher volumes and margin expansion over time.

From a financial perspective, Berkshire Hathaway follows one of the most conservative capital allocation approaches among large corporations. The company holds more than $100 billion in cash and cash equivalents, with nearly 90% invested in short-term U.S. Treasuries and other government-backed securities. This robust liquidity provides flexibility to pursue acquisition opportunities while generating dependable income.

Berkshire Hathaway has also been reshaping its equity portfolio. It exited its BYD stake, reduced holdings in Apple and Bank of America, and increased exposure to Japanese trading houses such as Mitsubishi and Mitsui. The company initiated a position in Alphabet, underscoring its preference for durable, cash-generative businesses. Under CEO Greg Abel, Berkshire Hathaway plans to fully divest its Kraft Heinz stake, recording a $3.76 billion write-down in the second quarter of 2025 after Kraft Heinz announced it was exploring strategic alternatives.

Overall, Berkshire Hathaway’s growing insurance float remains a powerful source of low-cost capital, strengthening its financial foundation and supporting long-term compounding of shareholder value.

Berkshire Hathaway’s Return on Capital

Return on equity (ROE) in the trailing 12 months was 7.3%, underperforming the industry average of 8%. 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 5.9%, lower than the industry average of 6.2%.

Analyst Sentiment

The Zacks Consensus Estimate for 2026 revenues indicates a 4.7% year-over-year increase, but the same for earnings implies a 0.5% year-over-year decrease. BRK.B has a Growth Score of F.

The consensus estimate for 2026 earnings has witnessed no movement in the last 30 days.
 

However, the same for CB moved 0.6% down, while that for PGR moved 0.4% north in the past 30 days.

Parting Thoughts on BRK.B Shares

Berkshire 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 becoming CEO on Jan. 1, 2026, while Buffett remains executive chairman. 

Still, some factors warrant caution. With the stock trading at a premium, returns on capital appear moderate and near-term earnings pressure persists. The company has a VGM Score of F. It is better to stay away from this Zacks Rank #4 (Sell) stock presently.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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