Berkshire Hathaway Sees Mixed Results While Transitioning Leadership
Berkshire Hathaway Inc. (BRK-B), with a market cap of $1.1 trillion, operates in insurance, freight rail transportation, and utilities globally. Headquartered in Omaha, Nebraska, it offers various insurance products, operates railroad systems across North America, and manages electricity generation, transmission, storage, and distribution from natural gas and other sources.
Stock Performance Against the Market
Over the past year, Berkshire Hathaway’s stock has outperformed the broader market, achieving a 27.6% increase over 52 weeks and a 14.3% rise year-to-date (YTD). In contrast, the S&P 500 Index ($SPX) reported gains of just 8.6% for the past year, with a 4.3% decline YTD.
Drilling down further, BRK.B also surpassed the performance of the iShares U.S. Financial Services ETF (IYG), which saw a 21.4% increase over the last year and a modest 1.4% uptick this year.
Leadership Changes and Q1 Results
On May 6, shares of Berkshire Hathaway saw a slight increase following the announcement of CEO Warren Buffett stepping down. Greg Abel, the vice chairman of non-insurance operations, was named his successor.
However, the company’s stock declined more than 5% after its Q1 results released on May 3 came in below expectations. Sales totaled $89.72 billion, a decrease from $89.86 billion year-over-year, and below the estimated $92.2 billion. The earnings per share (EPS) fell to $4.47 from $5.19 in the previous year, missing analyst expectations by 7.1%.
Looking ahead to the end of 2025, analysts project a 6.9% drop in BRK.B’s EPS, bringing it to $20.48. Over the past four quarters, the company has met or surpassed analysts’ consensus estimates in two instances, falling short in the other two.
Analyst Ratings and Price Targets
Among the six analysts covering BRK.B, the consensus rating is a “Moderate Buy,” comprising two “Strong Buy” ratings and four “Holds.” This configuration has remained stable in recent months.
On May 5, Brian Meredith from UBS Group AG (UBS) reaffirmed a “Buy” rating with a price target of $606 following Buffett’s announcement of his succession plan. Buffal remains involved in a strategic advisory capacity and retains his shares.
Berkshire Hathaway’s mean price target stands at $533.25, suggesting a 2.9% premium over current market prices. Additionally, the highest target of $606 indicates a significant potential upside of 16.9% based on current values.
On the date of publication, Kritika Sarmah did not hold any positions in the securities mentioned in this article. All data is for informational purposes. For full details, refer to the Barchart Disclosure Policy here.
The opinions expressed in this article are those of the author and do not reflect the views of Nasdaq, Inc.
