What Should You Do With Berkshire Stock Ahead Of Q4 Earnings?

Berkshire Hathaway BRK.B is expected to witness an improvement in its top line but a decline in its bottom line when it reports fourth-quarter 2025 results. 

The Zacks Consensus Estimate for BRK.B’s fourth-quarter revenues is pegged at $102.9 billion, indicating an 8.4% increase from the year-ago reported figure.

The consensus estimate for earnings is pegged at $5.19 per share. The Zacks Consensus Estimate for BRK.B’s fourth-quarter earnings witnessed no movement in the past 30 days. The estimate suggests a year-over-year decrease of 22.9%. 

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BRK.B’s Decent Earnings Surprise History

Berkshire Hathaway’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed in the remaining two, the average surprise being 19.18%. 

What the Zacks Model Unveils for Berkshire Hathaway 

Our proven model does not conclusively predict an earnings beat for Berkshire this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat. This is not the case, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: BRK.B has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $5.19.

Berkshire Hathaway Inc. Price and EPS Surprise

Berkshire Hathaway Inc. price-eps-surprise | Berkshire Hathaway Inc. Quote

Zacks Rank: BRK.B currently has a Zacks Rank #4 (Sell). 

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

Factors Likely to Shape BRK.B’s Q4 Results

Berkshire Hathaway’s insurance operations are likely to have benefited in the to-be-reported quarter from improved pricing, strong policy retention, higher average auto premiums, broader market exposure and favorable reserve developments. A relatively mild catastrophe environment probably supported underwriting profitability. Continued growth in the insurance segment is also expected to have contributed to an expansion of the company’s float.

GEICO, Berkshire’s private passenger auto insurer, likely saw gains from an increase in policies in force, higher average premiums per policy, lower claims frequency and improved operating efficiencies.

Investment income is likely to have risen as well, driven by higher yields and a larger investment asset base.

At BNSF, the railroad subsidiary, results may have been pressured by an unfavorable business mix and lower fuel surcharge revenues. However, earnings are likely to have been supported by higher unit volumes, improved workforce productivity and reduced operating expenses.

The utilities and energy segment is expected to have delivered a strong performance, fueled by increased contributions from natural gas pipelines and other energy-related operations.

Meanwhile, the Service and Retail divisions are likely to have benefited from a strengthening economic backdrop, with rising consumer activity supporting revenue growth and margin expansion.

Share buybacks are likely to have supported the bottom line.

BRK.B’s Price Performance & Valuation

The stock outperformed the industry, but underperformed the sector and the S&P 500 in the fourth quarter of 2025. 

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The stock is trading at a price-to-book value of 1.55X, lower than the industry’s 1.48X. It is attractively valued compared with other insurers like The Progressive Corporation PGR and The Allstate Corporation ALL.

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Investment Thesis

Berkshire Hathaway’s insurance operations form the core of its business model, accounting for roughly one-quarter of total revenues and serving as a key engine of long-term growth. While its insurance operations remain the primary driver of return on equity, they are susceptible to catastrophe-related losses, which can introduce volatility to underwriting results. 

Yet, Berkshire’s broad and diversified business model ensures overall stability.

The Insurance segment’s ongoing expansion has fueled growth in its insurance float—the pool of premiums held before claims are paid—which rose from around $114 billion at the end of 2017 to $176 billion by the third quarter of 2025. This float provides a low-cost source of capital that Berkshire has adeptly invested in high-quality businesses and assets with durable earnings potential and strong returns, including significant holdings in Apple, Coca-Cola, BNSF Railway, and various utility companies.

Berkshire’s solid financial standing also enables steady share repurchases—an effective capital allocation approach that contributes to long-term shareholder value creation.

How to Play BRK.B Stock

Berkshire Hathaway, a conglomerate with over 90 subsidiaries spanning a wide range of industries, brings diversification and dynamism to shareholders’ portfolios. 

Berkshire’s insurance business is likely to benefit from solid results at GEICO as well as higher interest income from short-term investments. 

However, given premium valuation, an unfavorable return on capital, a likely decline in the fourth-quarter bottom line, lowered times interest earned, near-term earnings pressure and contracting margins, investors should shy away from BRK.B stock presently.

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

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