Warren Buffett’s Berkshire Hathaway is firing on all cylinders with a $1 trillion market value in sight, according to UBS. Analyst Brian Meredith hiked his 12-month price target on the Berkshire Class A shares to $715,000 from $655,000, and Class B shares to $477 from $435. The new target would translate into a 16% gain from Tuesday’s close of $617,300, which would give the Omaha-based conglomerate a market capitalization above $1 trillion. “We continue to believe BRK’s shares are attractive in an uncertain macro environment with strong fundamentals in Insurance and improving fundamentals in BNSF,” Meredith said in a note. “BRK has record cash level to take advantage of investment opportunities and repurchase shares.” BRK.A 1Y mountain Berkshire Hathaway Berkshire on Saturday reported a 28% jump in operating earnings in the fourth quarter due to huge gains in its insurance business. Its cash pile swelled to a record of $167.6 billion. Berkshire’s insurance crown jewel Geico enjoyed a profitable year, with net underwriting earnings of $5.4 billion in 2023, driven by premium rate increases and lower claims. UBS said Geico’s turnaround has materialized faster than it expected, and the Wall Street firm said the auto insurer should start growing policies in force as early as the second quarter. Meanwhile, Berkshire’s reinsurance and primary insurance operations continued to look solid and benefit from the current market environment, UBS said. One area of recent weakness for Berkshire has been BNSF, which saw a 16% drop in net earnings last year. However, UBS expects the railroad business to fare better than its peers because BNSF carries more freight and spends more on capital expenditures. The conglomerate recently touched consecutive record highs, trading above $647,000 for Class A shares at its peak and boasting a market value above $900 billion. Berkshire has gained about 15% in 2024, more than double the S & P 500′s return.
