Hold BRK-B at current weight; do not add at $502.35 and do not trim—two clear triggers define action
HOLD at current weight. The 22.6x forward P/E above historical 15-18x band and RSI 44 with negative MACD momentum argue against adding, while the 200 SMA at $492.77 intact, $365B cash fortress, and P/B less than 1.0 prevent full exit. Two clear triggers: (1) Add-on-strength on close >$506.76 with volume ≥1.5x 30-day average and MACD histogram contracting toward zero, reassessing to Overweight; (2) Reassess-to-Underweight on close <$492.77 on volume >4M, reducing position by 15-20%. The 9/28 Hold reflection produced +0.0% alpha with elaborate framework, confirming that balanced Hold setups warrant simpler positioning rather than multi-tier scaling triggers.
| Position | Action |
|---|---|
| Reassess-to-Underweight trigger: close <$492.77 (200 SMA) on volume >4M | Reduce position by 15-20% |
Berkshire Hathaway's fortress balance sheet with $365.51B in cash is optimally positioned to generate record interest income in the current high-yield regime, while Q2 2026 earnings acceleration and resumed buybacks signal undervaluation.
| Indicator | Value | Signal |
|---|---|---|
| RSI (14) | 44.41 | neutral |
| MACD | -0.45 | bearish |
| MACD Signal | +0.52 | bearish |
| MACD Histogram | -0.97 | bearish |
| 200-day SMA | $492.77 | bullish |
| 50-day SMA | $506.76 | bearish |
| 10-day EMA | $505.66 | bearish |
| 20-day SMA (Bollinger Middle) | $507.54 | neutral |
| Bollinger Upper Band | $517.26 | bearish |
| Bollinger Lower Band | $497.83 | bullish |
This report is AI-generated for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. Full disclaimer.
Then: Reduce position by 15-20%
Q2 2026 buyback resumption signals management views shares as cheap
EV: +5.7% · concedes: The forward P/E of 22.64x looks elevated vs the trailing 12.64x, as analysts expect EPS to drop from $39.74 TTM to $22.19 forward; The forward EPS estimate doesn't bake in scenarios where Berkshire deploys even a fraction of that $365B in a market dislocation; The gap between TTM EPS of $39.74 and forward EPS of $22.19 reflects mechanical normalization after outsized 2024-2025 investment gains, not a deterioration in operating fundamentals; The forward earnings reset doesn't reflect the operating reality
BRK-B is structurally overvalued at 22.6x forward earnings with a 44% earnings decline ahead, technically deteriorating below key moving averages, and burdened by a $365B cash hoard earning only 4-5% that represents capital misallocation rather than optionality.
· concedes: The fortress balance sheet is real; Insurance float is a genuine structural advantage; Buffett's capital allocation track record is unparalleled; The $365B cash hoard provides liquidity in a dislocation; GEICO, BNSF, and BHE have genuine moats, even if maturing
→ vs conservative: 22.6x forward P/E above historical 15-18x band is backward-looking framing anchored to zero-interest-rate era; current multiple reflects structural reset in earnings power from $365B cash compounding at 4-5%
→ vs conservative: 30-year yield at 2002 highs is a tailwind for float reinvestment and Treasury marks, not a risk factor warranting defensive positioning
→ vs neutral: $4.4B buyback being 'too small to signal conviction' misses that the change in behavior (pause in 2025, restart in Q2 2026) is the Buffett tell about intrinsic value
→ vs neutral: Bearish MACD cross and sub-50-SMA price action is misread as breakdown; context shows long-term support test in low-volatility regime where BRK-B historically outperforms
→ vs neutral: 'No catalyst, wait for Q3' framing ignores that Q2 results (revenue +19%, net income +107%) are already explosive and buyback restart IS the catalyst
| ATR (14) | $5.97 | neutral |
| VWMA | $509.05 | bearish |
| Close | $502.35 | neutral |
Support: 497.83 · 492.77 | Resistance: 505.66 · 506.76 · 507.54 · 510 · 511 · 517.26
The overall technical picture is mixed: long-term trend remains bullish (price above 200 SMA), but medium and short-term trends are neutral to bearish (price below 50 SMA and 10 EMA). Momentum is the primary concern with MACD having just crossed bearish and the histogram expanding negatively. Volatility remains low and orderly (ATR $5.97). Volume confirmation is mildly negative with the VWMA trading well above spot price and the Sep 18 high-volume session confirmed as distribution rather than accumulation. Key levels to watch: defense of $497.83 lower Bollinger band and $492.77 200 SMA as critical long-term support. HOLD rating with neutral-to-cautious bias—neither aggressively long nor short until momentum reverts or a structural break occurs.
Market Cap
$1,075.39 B
P/E Ratio (TTM)
12.64
Forward P/E
22.64
P/B Ratio
~1.50
Beta
0.603
EPS (TTM)
$39.74
Forward EPS
$22.19
50-Day Avg
$506.53
200-Day Avg
$492.71
52-Week Range
$464.01 – $537.74
Revenue (TTM)
$384.7 B
EBITDA (TTM)
$130.7 B
Net Income (TTM)
$85.8 B
Operating Margin
32.6%
Profit Margin
22.3%
ROE
12.1%
ROA
6.0%
Free Cash Flow (TTM)
$72.0 B
Total Assets
$1,263.07 B
Stockholders' Equity
$747.91 B
Cash & ST Investments
$365.51 B
Equity Investments
$323.78 B
Total Debt
$128.60 B
Net Debt
$87.99 B
Debt/Equity
0.17x
Current Ratio
2.89x
Tangible Book Value
$600.54 B
Capex
~$21 B/yr
Buybacks (2025)
$0
Buybacks (Q2 2026)
$4.4 B
Q2 2026 Net Income
$25.67 B
Q2 2026 Revenue
$117.89 B
Q2 2026 EPS
$11.91
H1 2026 Net Income
$35.77 B
FY2025 Revenue
$410,522 M
FY2025 Net Income
$66,968 M
FY2025 Diluted EPS
$31.04
FY2025 Interest Income
$23,261 M
FY2025 Free Cash Flow
$25,042 M
Interest Expense
$5,069 M
Insurance Loss & Adjustment Expense (2025)
$61.69 B
Long-Term Debt
$125.76 B
Strengths
Concerns
HOLD — Berkshire Hathaway is a best-in-class long-term compounder with unmatched financial strength, including $365.5B in deployable cash against just $128.6B in debt, and diversified operations spanning insurance (GEICO, General Re), BNSF Railway, and energy. Q2 2026 demonstrated exceptional momentum with earnings doubling YoY, and resumed buybacks signal management views shares as attractively priced. However, valuation is not stretched enough to justify aggressive new buying at current levels near $500 (50-day MA), and the forward earnings reset implied by $22.19 vs. $39.74 TTM EPS creates near-term headwinds; tactical investors should await pullbacks to the $475-490 zone or 200-DMA ($493) for better entry points.
Macro: Elevated long-end Treasury yields (30Y at highest since 2002) alongside "higher-for-longer" Fed expectations (96% probability of no cuts in 2026) define the macro regime. Mortgage rates touched 7.58% (~3-year high). Gold settled at $4,147.70 (+0.27%). Soft-landing consensus priced with just 8% recession probability. Equities wavered and declined late-week as yields climbed. FRED macro data unavailable due to missing API key.