Warren Buffett’s Berkshire Hathaway stock eyes rebound ahead of earnings

Berkshire Hathaway stock price rose by over 1.5% on Thursday as American shares rebounded and as investors wait for its financial results. BRK jumped to $753,250, bringing its market capitalization to over $1.07 trillion. It has also formed an inverted head-and-shoulders pattern, pointing to a rebound after its results.

Berkshire Hathaway stock price technical analysis points to a rebound 

The daily timeframe chart shows that the BRK stock price soared to a record high of $813, 530 last year and then pulled back to a low of $684,900 in August. It has now rebounded to $753,250. 

A closer look shows that the stock has formed the highly bullish inverted head-and-shoulders pattern, which often leads to a strong bullish breakout. 

The stock has also formed an ascending triangle pattern, which is made up of a horizontal triangle and an ascending trendline. This pattern also leads to more upside over time.

Berkshire Hathaway stock has also remained above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator.

Therefore, the most likely forecast is where the stock continues rising after its earnings. If this happens, the next key target will be at $774,367, its highest level in November last year. A move above that level will point to more gains, potentially to the all-time high of $813,530.

BRK stock chart | Source: TradingView 

Warren Buffett’s business is doing well 

Berkshire Hathaway is doing well as evidenced by its recent financial results. The company has grown to accumulate one of the biggest cash hoards in the United States. Its most recent results showed that its cash pile jumped to over $381 billion.

That cash hoard means that the company is making over $15 billion a year in interest since short-term government bonds are yielding about 4%.

The results also showed that its operating earnings jumped to over $13.5 billion as its insurance business soared. However, Geico, its auto insurance business, posted weak earnings as claims jumped.

Meanwhile, the results showed that the operating earnings at BNSF rose modestly to $1.4 billion, helped by higher agricultural transportation demand.

The results also revealed that its utilities business, which runs companies like PacificCorp, MidAmerican, and NV Energy experienced a 9% decline in its profits.

The other notable happening in the results was that the company did not buy its own shares for the fifth straight quarter. As such, with short-term interest rates falling, there is a likelihood that the company will resume the purchases.

Berkshire Hathaway has done some changes in its portfolio. For example, the company recently slashed its Amazon stake by over 75%. This was notable as Amazon’s stock has struggled in the past few months amid a surge in its data center spending. Its stock has dropped by 20% from its highest level in November last year.

Berkshire Hathaway bought the New York Times shares. That purchase helped to push the NYT stock to a record high, even as Donald Trump calls it a failed brand. The company also invested in UnitedHealth, one of the top insurance companies.

Most analysts have a bullish rating on the stock, with the average target being $765,476, much higher than the current $753,250.