By Anton Ladnyi, CFA · ex-Goldman Sachs · ex-J.P. MorganPublished Updated
BRK-B — Berkshire Hathaway (Class B ~$477) on ~21x operating earnings basis with Q1 2026 operating earnings $11.35B (+18% YoY), insurance underwriting +28%, $397B cash pile, and Greg Abel's first full year as CEO; OxyChem acquisition ($9.7B, closed Jan 2) and Japanese insurance investment signal more active capital deployment.
BRK-B Price Target & Rating
BRK-B's grade is Buy, with limited downside risk (CVaR -5.3%), and quality metrics (net margin 19%, ROE 10%). Berkshire Hathaway Inc. (BRK-B) trades at $483.68 with a valuation grade of Buy: a trailing P/E of 14.4x at a 3% premium to sector median, net margins of 19.3%, a DCF-implied intrinsic range of $407–$609 suggesting a +5% margin of safety, beta 0.62 (defensive risk profile).
DCF Valuation Range
Key Takeaways
Valuation: Buy grade — P/E 14.4x — DCF range $407–$609 implies +5% margin of safety
Risk: CVaR -5.3% (95th percentile, 1-month) indicates moderate tail exposure; beta of 0.62 amplifies broad market moves in both directions
Strengths: Size 5.0/5, 19% net margin, 10% ROE dominate the factor profile
Catalyst: Alphabet $10B stake integration and AI return metrics (medium-term); Taylor Morrison close (H2 2026); additional $20B+ deployment announcement; BHE data center contracts; Q2 2026 operating earnings
Bear catalyst: Major acquisition at overvalued price; catastrophic insurance loss (Hormuz/hurricane season) above $10B; Abel reverses Buffett-era investment principles
Tail riskCVaR -5.3% over one month at the 95th percentile
DCF range$407–$609 intrinsic range; margin of safety +5%
Best useCore mega-cap Financials holding — not a source of diversified sector exposure
Next watchEarnings delivery consistency and margin trajectory
Quantitative Factor Profile
Value
3.0 / 5
Quality
3.0 / 5
Momentum
3.0 / 5
Volatility
4.5 / 5
Size
5.0 / 5
Key Metrics
BRK-B Key Metrics — Berkshire Hathaway Inc. 2026
Metric
Value
Current Price
$483.68
P/E Ratio (TTM)
14.4x
Forward P/E
22.5x
PEG Ratio
18.83x
P/S Ratio
2.8
EV/EBITDA
-2.2
Beta
0.62
Net Margin
19.3%
ROE
10.5%
Debt/Equity
17.7%
CVaR (95%, 1M)
-5.3%
Market Cap
$1.04T
Analyst View
Anton Ladnyi, CFA · A.L. Capital AdvisoryUpdated 2026-06-11
Rating Rationale
BRK-B — Berkshire Hathaway (Class B ~$477) on ~21x operating earnings basis with Q1 2026 operating earnings $11.35B (+18% YoY), insurance underwriting +28%, $397B cash pile, and Greg Abel's first full year as CEO; OxyChem acquisition ($9.7B, closed Jan 2) and Japanese insurance investment signal more active capital deployment.
$397B cash ($373B year-end 2025) growing each quarter; at current deployment pace, a single large acquisition could unlock significant value
Greg Abel's capital deployment: OxyChem ($9.7B closed Jan 2), Japanese insurance investment, resumed buybacks signal more active management than Buffett's final years
BHE (energy/utilities): four hyperscalers building large data center facilities in Iowa — BHE becoming an indirect AI infrastructure beneficiary
Greg Abel deploying cash pile: $10B into Alphabet (June 2026, first major AI investment), $9.7B OxyChem from Occidental (Jan 2026), $6.8B Taylor Morrison homebuilder (May 2026, first major acquisition under Abel) — systematic diversification beyond Buffett-era concentrated bets; new CFO Charles Chang effective June 1
↓ Bear Case
Deploying $397B productively at Berkshire's scale is the core challenge; any large acquisition overpayment would be permanent capital destruction
Berkshire joined US government syndicate covering ships through Strait of Hormuz — a major Middle East escalation could generate outsized insurance losses
Post-Buffett premium erosion: some of the historical valuation premium was attributable personally to Buffett; Abel must prove equal capital allocation discipline
BNSF railroad volumes cyclically sensitive; US recession would pressure BNSF earnings meaningfully
Portfolio reshaping: exited Visa, Mastercard, UnitedHealth Group, and Amazon — departing from Buffett-era conviction positions; new Delta Air Lines stake signals a return to airlines Buffett explicitly avoided; Abel's investment style unproven at this scale; BRK-B stock -2% YTD vs S&P +8%
What Changes the Rating
↑Catalyst:Transformative acquisition at <12x EBITDA announced; insurance float investment returns above 6%; $397B cash deployed >50% within 18 months
↓Stop / exit:Major acquisition at overvalued price; catastrophic insurance loss (Hormuz/hurricane season) above $10B; Abel reverses Buffett-era investment principles
Anton’s personal note
BRK-B is a Buy on the current read. The factor profile is constructive and the valuation is not stretched — a combination that tends to hold up reasonably well across market conditions. What I watch on this name is earnings consistency — specifically whether delivery against consensus is stable or deteriorating. That is usually where the rating gets confirmed or challenged before the price reflects it. The setup that would make me more positive is a quarter that confirms the operating leverage story. The setup that would make me cautious is any signal that consensus estimates are getting ahead of fundamentals.
— Anton Ladnyi, CFA
Earnings History
BRK-B Earnings History — EPS Surprise Rate 2026
Quarter
EPS Est.
EPS Actual
Surprise
Q1 2026
$5.05
$5.26
+4.2% ✓
Q4 2025
$5.17
$4.73
-8.5% ✗
Q3 2025
$5.73
$6.25
+9.0% ✓
Q2 2025
$5.04
$5.17
+2.7% ✓
Quarterly EPS — Estimate vs Actual
Earnings Projections
BRK-B Forward EPS Consensus Estimates 2026
Quarter
EPS Est.
YoY EPS
Analysts
Q2 2026
$5.01
-3.1%
2
Q3 2026
$5.30
-15.2%
2
Q4 2026
~$5.18
+9.6%
3
Q1 2027
~$5.37
+2.1%
3
~ Estimated from annual consensus — not a direct analyst survey
BRK-B — P/E 14.4x · Beta 0.62 • Quantitative grade: Hold • CVaR from one-year daily history · historical simulation
DCF Scenario Analysis
Hover each scenario for detail · current price $483.68
▼
Bear Case
$370
-23.5%
Fwd P/E: 17.7x
5.0 revenue CAGR · 14.0 exit multiple
◆
Base Case
$520
+7.5%
Fwd P/E: 24.9x
10.0 revenue CAGR · 19.0 exit multiple
▲
Bull Case
$700
+44.7%
Fwd P/E: 33.6x
15.0 revenue CAGR · 24.0 exit multiple
Pairwise Correlation Matrix
2 of 10 peer pairs correlated above 0.60 — diversification benefit within this cluster is structurally limited.
Extended Analysis — Buy, Hold or Sell? Risk Factors. Portfolio Fit.
Is BRK-B a buy, hold, or sell?
BRK-B carries a valuation grade of Buy. The trailing P/E of 14.4 sits broadly in line with the Financials sector median of 14.0x. Our discounted cash flow model produces an intrinsic range of $407–$609 — implying a +5% margin of safety at the current price of $483.68. The width of the DCF range reflects genuine uncertainty in the terminal growth rate assumption: the correct framework is a probability-weighted distribution over scenarios, not a single point estimate. See the DCF valuation framework for full methodology.
With a 9% beat rate on recent quarters, earnings predictability has been mixed. The most recent quarter delivered a 4.2% earnings surprise. Analyst estimate revisions are trending downward.
What are BRK-B's key risk factors?
With a beta of 0.62, BRK-B exhibits a defensive risk profile relative to the broad market. The 95th-percentile CVaR of -5.3% on a one-month horizon should inform position sizing directly: at a 10% portfolio weight, this tail event contributes approximately 0.5% of total portfolio loss in the worst 5% of months. Net margins of 19.3% fall below the Financials sector average of 28%, suggesting margin pressure. The balance sheet is conservatively leveraged at 18% debt-to-equity.
Implied volatility of 2.1% is below realized volatility of 14.0%, potentially making options relatively cheap. Insiders have been net sellers to the tune of $8.2M recently. While routine dispositions are common, the magnitude bears watching. Short interest is low at 1.0% of float, suggesting limited bearish conviction.
How does BRK-B fit in a diversified portfolio?
At typical HENRY portfolio weights — 10–20% of the equity allocation — BRK-B carries a beta of 0.62, meaning it amplifies broad market moves proportionally. The appropriate weight is not a function of conviction alone, but of the full covariance structure across all buyings. See the Ledoit-Wolf covariance framework for the methodology behind these calculations.
Among closely correlated names, BRK-B shows the strongest co-movement with MA (0.33), V (0.33), JPM (0.30). Investors seeking diversification should note these correlation dynamics when constructing multi-asset portfolios.
True portfolio risk is a function of the full covariance structure across all buyings — not individual stock metrics. The Portfolio Health Check quantifies this at the portfolio level: it surfaces hidden concentration, marginal CVaR contributions, and the degree to which your overall allocation deviates from an optimal risk-adjusted mandate. The BRK-B analysis here is a single node in that larger structure.
For the portfolio construction framework underpinning BRK-B’s position sizing and conviction rating — including IPS guardrails, Black-Litterman allocation, and CVaR constraints — see: Investment Policy Statement Framework →
Investor FAQ
Is BRK-B a buy or sell in 2026?
Berkshire Hathaway Inc. (BRK-B) carries a Buy quantitative rating from A.L. Capital Advisory, derived from Discounted Cash Flow intrinsic value analysis, five-factor model scoring (Value, Quality, Momentum, Volatility, Size), and CVaR tail risk measurement. At $483.68, the DCF midpoint margin of safety is +5% (intrinsic value range: $407 bear – $609 bull). Composite factor score: 3.7/5. Strongest factor: Size (5.0/5). Weakest factor: Value (3.0/5). Trailing P/E: 14.4x. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Portfolio Construction Framework →
What is the average analyst target price for BRK-B?
Wall Street consensus target for BRK-B: $520.33 (+7.6% upside from the current price of $483.68). The analyst target range spans $481.00 (most bearish) to $570.00 (most bullish). Consensus recommendation: Buy. Note that analyst price targets typically reflect a 12-month forward horizon and are derived from a blend of DCF, comparable-company, and sum-of-the-parts analysis. A.L. Capital Advisory’s quantitative Buy rating is produced independently — from DCF intrinsic value, five-factor model scores, and CVaR tail risk — and does not mechanically track Street consensus. When the two diverge, the divergence itself is informative: it can reflect differences in time horizon, valuation methodology, or the degree to which the current price already discounts the consensus case. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Monte Carlo Simulation Framework →
How does BRK-B score on Value, Quality, Momentum, Volatility, and Size?
BRK-B five-factor scores (A.L. Capital Advisory, 1–5 scale): Value 3.0/5 (neutral) — measures current price versus DCF intrinsic range and trailing earnings multiples; Quality 3.0/5 (neutral) — captures profitability metrics including return on equity, net margin (ROE: 10.5%) and net margin (19.3%); Momentum 3.0/5 (neutral) — reflects recent price trajectory and earnings surprise consistency; Volatility 4.5/5 (strong) — inverse measure derived from beta, where lower historical volatility earns a higher score; Size 5.0/5 (strong) — market capitalisation rank (mega-cap $1T+ scores 5/5). Composite: 3.7/5. Factor scores above 4.0 signal a tailwind in that dimension; below 2.0 signals a material headwind. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Black-Litterman Model →
What is BRK-B's tail risk and CVaR?
The 95th-percentile Conditional Value at Risk (CVaR) for BRK-B on a one-month horizon is -5.3%. CVaR represents the expected average loss in the worst 5% of monthly outcomes — a more conservative tail risk measure than standard VaR, which only marks the loss threshold. Beta of 0.62 indicates below-market volatility. For reference, a diversified S&P 500 ETF carries a one-month CVaR of roughly -8% to -12% in normal market conditions; individual equity CVaR is higher due to idiosyncratic risk. At the portfolio level, what matters is the marginal CVaR contribution of each holding — not its standalone figure. The A.L. Capital Advisory Portfolio Health Check quantifies each position's marginal tail-risk contribution across your entire holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: CVaR & Tail-Risk Methodology →
What is BRK-B's intrinsic value and DCF price target?
A.L. Capital Advisory's DCF model produces an intrinsic value range of $407 (bear case) to $609 (bull case) for Berkshire Hathaway Inc. (BRK-B). At $483.68, the midpoint margin of safety is +5% (positive = discount to intrinsic mid; negative = premium). The bear-to-bull spread reflects genuine sensitivity to the two dominant DCF inputs: the terminal growth rate and WACC. Terminal value typically accounts for 60-80% of total intrinsic value in most equity DCF models, which is why a range is more analytically sound than a point estimate. The central analytical question is not what the DCF outputs as a single number but which growth trajectory the current market price already discounts. All DCF analysis follows CFA Institute standards and is conducted by Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework →
What would trigger a rating upgrade or downgrade for BRK-B?
Upgrade trigger: Upgrade to Strong Buy on evidence of accelerating earnings surprise magnitude combined with improvement in the Value factor score — specifically if the current 14.4x P/E is supported by an upward revision to DCF terminal growth assumptions. Downgrade trigger: a sustained reversal in the Quality and Momentum factor scores for two or more consecutive quarters. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Investment Policy Statement Framework →
Does BRK-B consistently beat earnings estimates?
BRK-B has beaten consensus EPS estimates in 9% of tracked quarterly periods — indicating inconsistent delivery. The most recent reported quarter beat consensus by 4.2%. Below-average earnings consistency is a primary headwind to the rating and a key watch item in the quantitative model. Earnings surprise magnitude and direction are incorporated into the Momentum and Quality dimensions of the five-factor scoring model. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework →
How does BRK-B contribute to portfolio risk and diversification?
BRK-B carries a beta of 0.62 (low-volatility / defensive relative to the broad equity market). A beta above 1.0 means the position amplifies market moves in both directions at a typical portfolio weight. Strongest peer co-movement: MA (0.33), V (0.33), JPM (0.30). Holding BRK-B alongside these names in the same portfolio increases concentration risk. True portfolio risk is a function of the full covariance structure — a single stock's beta does not reveal its marginal contribution to portfolio tail loss. The A.L. Capital Advisory Portfolio Health Check quantifies concentration risk (Herfindahl-Hirschman Index), pairwise correlations, and marginal CVaR contribution across all your holdings. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: Ledoit-Wolf Covariance Framework →
What quantitative methodology does A.L. Capital Advisory use to analyse BRK-B?
A.L. Capital Advisory analyses Berkshire Hathaway Inc. (BRK-B) using a four-component quantitative framework grounded in CFA Institute standards. (1) DCF Valuation: projects free cash flows under bear and bull assumptions, discounts at WACC to produce an intrinsic value range with margin-of-safety calculation. (2) Five-Factor Scoring: each equity is scored 1–5 on Value, Quality, Momentum, Volatility, and Size. (3) CVaR Tail Risk: 95th-percentile Conditional Value at Risk from historical simulation of daily returns on a one-month horizon. (4) Earnings Surprise Analysis: quarterly beat rate and magnitude are incorporated into the Momentum and Quality factor scores. The current Buy rating for BRK-B is the output of applying this complete framework to current data. Analysis by Anton Ladnyi, CFA (ex-Goldman Sachs, ex-J.P. Morgan) · A.L. Capital Advisory. Full methodology: DCF Valuation Framework → · CVaR & Tail-Risk Methodology →
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This analysis is produced using a systematic quantitative framework applied to market data and does not constitute investment advice. Prose commentary is AI-assisted and generated from structured quantitative inputs. All data and metrics are as of 2026-06-11 and are point-in-time estimates subject to revision without notice. CVaR figures are based on historical simulation and do not guarantee future outcomes. DCF ranges and upgrade/downgrade triggers are forward-looking statements based on current assumptions and may not materialise. Past performance does not guarantee future results. This analysis does not account for individual circumstances, tax position, or investment objectives — consult a qualified financial advisor before making investment decisions. This content is intended for informational purposes only and does not constitute regulated investment advice under MiFID II or FCA guidelines. This content is not intended for US persons or residents of jurisdictions where its distribution would be contrary to local law or regulation. This service is not directed at residents of Finland, Sweden, Norway, Denmark, Iceland, or Poland. The author may hold long or short positions in securities mentioned in this analysis. Nothing on this page represents a solicitation to buy or sell any security. A.L. Capital Advisory is an independent private advisory practice and is not affiliated with Berkshire Hathaway Inc.
CFA Portfolio Advisory — BRK-B
Discuss this analysis, position sizing, or your full portfolio mandate with Anton Ladnyi, CFA.
