Sign InBerkshire Hathaway Faces Pullback Amid High Volume and Technical Resistance, Analysts Remain Cautious
Summary
On May 05, 2025, Berkshire Hathaway Inc. (BRK-B) experienced a 5.12% drop to $512.15 amidst selling pressure and technical signals indicating potential stabilization around key support levels, all while its long-term investment potential remains solid under Warren Buffett's leadership.
Technical Analysis
Berkshire Hathaway Inc. (BRK-B) closed at $512.15 on May 05, 2025, down 5.12% from the previous day, a significant pullback after a recent high near $521.18. The price dipped close to its immediate support at $493.54 but rebounded slightly during the session. The RSI at 41 indicates the stock is nearing oversold conditions, though not deeply so. The 50-day moving average ($516.28) currently acts as a resistance level, while the 200-day moving average ($472.29) remains a strong longer-term support. The MACD remains positive at 0.74, suggesting underlying momentum is still mildly bullish despite recent weakness. The ATR of approximately $2.86 reflects moderate intraday volatility. Volume nearly tripled the average daily volume at over 15.5 million shares, indicating high selling pressure on May 5. Resistance in the near term is approximately $515.81.
For the next trading day (May 06, 2025), the stock may see some stability or a slight rebound given oversold RSI and proximity to support, but the heavy volume selloff and resistance just above should cap sharp recoveries. Over the upcoming week, a consolidation phase just above $493–$500 is plausible unless a catalyst triggers a renewed move. A bounce toward $515–$520 is possible but may require improved market sentiment or positive company-specific developments.
Fundamental Analysis
Berkshire Hathaway trades at $512.15 with a market capitalization of $1.10 trillion. At a trailing twelve months (TTM) EPS of $41.24, the current P/E ratio is 12.42, indicating that shares are reasonably valued relative to earnings, especially for a large-cap conglomerate known for stable long-term cash flows. The Discounted Cash Flow (DCF) intrinsic value stands at approximately $476.85 per share, which is below the current market price, suggesting modest overvaluation on a pure cash flow basis. Analyst consensus price targets align below the current price, with a median target of $465.50, reflecting caution from the broader market.
Recent news highlights Berkshire’s diversified portfolio, including significant holdings in banking, oil, and Apple, along with ongoing effects from tariffs and inflation discussed at the annual meeting. While macroeconomic concerns have pressured the stock recently, the company’s scale and management reputation under Warren Buffett’s leadership continue to provide a strong competitive moat and resilience.
The next earnings announcement scheduled for August 1, 2025, may serve as a key catalyst for reassessing valuation. Until then, incremental value realizations will depend on broader market trends and sector-specific developments.
Intrinsic Value and Long-Term Investment Potential
The intrinsic valuation near $477 versus a current price near $512 suggests a slight premium, possibly justified by Berkshire’s growth prospects and asset base in a rising inflation environment. The conglomerate’s ability to generate consistent cash flow, reinvest capital effectively, and adapt to economic cycles supports favorable long-term investment potential. Historical outperformance relative to the S&P 500, combined with a strong balance sheet and diversified earnings streams, provides a margin of safety and the opportunity for capital preservation plus moderate growth.
Investors focused on long-term wealth accumulation may view BRK-B as a strategic holding especially given its value-oriented P/E multiple and strong cash flow, despite short-term volatility and market corrections.
Overall Evaluation
BRK-B currently exhibits characteristics of a 'Hold' candidate. The notable sell-off coupled with high volume and resistance overhead suggests limited upside in the near term, while technical indicators hint at relative stabilization around current support levels. On fundamentals, the stock is fairly valued to slightly overvalued against discounted cash flows and consensus targets; however, its strong cash flow generation, diversified business model, and seasoned management reinforce a resilient investment profile.
Given the balance of near-term technical weakness and solid long-term fundamentals, holding existing positions while monitoring upcoming earnings and macroeconomic developments aligns with a prudent approach. Potential buyers might wait for a more pronounced correction closer to intrinsic value before initiating new positions.
