Berkshire Hathaway Shows Oversold Conditions: Potential for Near-Term Bounce Amid Strong Fundamentals

Technical Analysis

Berkshire Hathaway Inc. (BRK-B) closed at $493.53 on June 6, 2025, up 0.98% with intraday trading confined between $491.63 and $496.10. The Relative Strength Index (RSI) stands at 28, indicating oversold conditions and potential for a near-term technical bounce. The stock remains below its 50-day moving average ($515.26) but above its 200-day moving average ($480.87), signaling a mixed intermediate trend with long-term support intact. MACD remains negative (-8.19), suggesting underlying bearish momentum, though the low Average True Range (ATR) of 1.60 points signals subdued volatility. Immediate resistance at $493.54 was just breached alongside support near $492.64, indicating consolidation around these levels for the next trading session.

For June 9, 2025, a modest upward move is probable, supported by the oversold RSI and confirmed by the slight breach of resistance. Over the next week, expect a potential corrective rally testing the 50-day moving average near $515, though a failure to clear this peak could result in renewed downside pressure toward $480 support.

Fundamental Analysis

Berkshire Hathaway’s trailing twelve-month EPS is $37.51 with a price-to-earnings (P/E) ratio of 13.16, reflecting a relatively attractive valuation given its diversified portfolio and stable earnings base. The market capitalization is approximately $1.06 trillion, marking it as a mega-cap with significant market influence and liquidity. The latest discounted cash flow (DCF) valuation stands at $469.57, about 5% below the current market price, indicating a modest premium over intrinsic value but within reasonable bounds given assured earnings quality and future growth potential.

Forward consensus among analysts points to a median price target of $465.50, suggesting a modest downside risk. However, the general analyst sentiment remains bullish with four buys and three holds, reflecting confidence in stable fundamentals despite macro uncertainties. The upcoming earnings announcement dated August 1, 2025, may serve as a critical catalyst to validate recent performance trends and future guidance.

Intrinsic Value and Long-term Investment Potential

The intrinsic value estimate ($469.57) is slightly lower than the current price, indicating that the stock is trading at a small premium. Nonetheless, this premium is justifiable given Berkshire’s robust asset base, diverse revenue streams, and historically disciplined capital allocation. Warren Buffett’s planned departure raises succession questions, though his chosen successor's readiness mitigates transition risk, preserving long-term investment appeal. Berkshire’s defensive qualities and diversified industrial and financial holdings make it an attractive core holding for patient investors focused on capital preservation and moderate growth over time. The stock’s current oversold technical position might provide an entry point or opportunity to accumulate at a fair valuation.

Overall Evaluation

Berkshire Hathaway’s current technical posture reflects short-term oversold conditions poised for a corrective bounce. The fundamental backdrop remains solid with reasonable valuation multiples relative to earnings stability and asset quality. Near-term price targets suggest moderate downside relative to yesterday’s close, but the intrinsic value and strong market capitalization support medium- to long-term stability. Although near-term volatility may persist around the 50-day moving average, the company’s defensive positioning and succession planning reduce structural risk.

Categorized as a Hold candidate, Berkshire Hathaway presents limited upside from current levels balanced by solid fundamentals, oversold technical indicators, and near-term event risk. The stock is well-positioned for steady accumulation through market fluctuations rather than aggressive entry or exit points in the immediate horizon.