As you might know, Berkshire Hathaway Inc. (NYSE:BRK.A) just kicked off its latest quarterly results with some very strong numbers. The company beat forecasts, with revenue of US$94b, some 5.8% above estimates, and statutory earnings per share (EPS) coming in at US$21,122, 39% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, Berkshire Hathaway's three analysts are forecasting 2024 revenues to be US$368.7b, approximately in line with the last 12 months. Statutory earnings per share are forecast to plummet 33% to US$31,455 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$352.2b and earnings per share (EPS) of US$33,030 in 2024. So it's pretty clear consensus is mixed on Berkshire Hathaway after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.
There's been no major changes to the price target of US$702,750, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Berkshire Hathaway, with the most bullish analyst valuing it at US$759,000 and the most bearish at US$640,000 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.8% by the end of 2024. This indicates a significant reduction from annual growth of 9.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Berkshire Hathaway is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Berkshire Hathaway. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Berkshire Hathaway going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Berkshire Hathaway that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
